Preamble

The House met at Ten o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

EMPLOYMENT EXCHANGES

10.5 a.m.

Mr. Nicholas Ridley: I beg to move,
That leave be given to bring in a Bill to regulate all employment exchanges, both public and private; to ensure competition between them; and for connected purposes.
The Bill would regulate all employment exchanges, fee-charging, non-fee-charging, profit-making or not profit-making, whether they be trade unions or trade associations or public labour exchanges. I think that a Bill is needed to draw up fair rules of competition so that all the agencies and organisations in this field can compete fairly on equal terms, and so that the exact position of the law is known to all.
There was a Bill which attempted to do this for one section only, the private fee-charging employment agencies, but I think that it is wrong to single out one section of the profession like that and try, as it were, to level it down to the standard of all the others. Instead, I am sure that we should not allow the Government to muzzle their competitors, as it were. We should draw up rules so that all employment agents can compete on fair terms.
Public labour exchanges have one enormous advantage as it is, in that they are free: they are paid for by the taxpayer. There is no doubt that that is a great advantage, and it must be a little sad for the Ministry of Labour that, with this enormous advantage, it has failed to compete for the ever-growing volume of business in this field and with the immense growth of private exchanges since the war, although private exchanges, of course, have to charge fees in order to make them solvent. It is a little humiliating for those who support the State as always being right against

private organisations that this state of affairs has led the National Economic Development Council to suggest that the State should do something about the labour exchanges to make them more attractive. Indeed, we now have news of a statement by the Minister of Labour next Monday setting out how he is to improve the public exchanges.
All this I welcome. It is necessary to improve the image, if I may use that rather tarnished word, of the public exchanges, and I think that one of the ways in which this may have to be done is by encouraging public exchanges to charge fees. I think that people do not quite like to go for something for nothing. They prefer to be charged the right price, because then they know they are getting value for money, and I do not see why the public should pay to provide free competition for one other form, that is, the private agency. I am glad to hear that the Federation of Employment Agents' has offered to help the Government and the N.E.D.C. to get their labour exchanges on to a more efficient and attractive footing. All this is to be welcomed.
We come, therefore, to the need, in my opinion, to lay down rules whereby these varying sorts of employment agencies—trade unions, labour exchanges, private fee-charging agencies—can compete fairly between themselves. I do not think that any wider form of control is needed than that. Where we have a profession such as this, its rules of competition should be laid down and should be made to work properly.
The Bill which I seek leave to bring in attempts in the main to do two things only: firstly, to insist that competition is free and fair and open between all corners in this field, and secondly, to make sure that the prices, fees or rates which are charged are made known to the general public so that all can compare the different services and different prices which are being offered. If one is not satisfied with A one can go to B. This is the cardinal rule of the laws behind a free society which adopts competition and the market as its test. After all, this is just one more market. This is the market for employment, and those who wish to change their jobs or seek new employees must know who is available in the market, which jobs are available and at


what price. Just as if one picks up the Financial Times one can read the price of every share, so one ought to be able to read at a glance the price of every job and the charge of every agency so that greater knowledge of job opportunities is available. That is all that is necessary to regulate a profession of this sort.
The Bill will contain rules that it shall be illegal under penalty of a heavy fine to make restrictive agreements between two or more agencies to follow a pricing policy; in other words, to fix a price ring. The trade federations would be stopped from issuing instructions or recommendations about the increasing or cutting of fees or in any way aligning fees one with another. The Bill would lay the duty upon all agents to publish their fees. The fees would have to be notified to the licensing authority, and notification of their fees to any prospective clients would be another condition. I would go so far as to say that the level of fees charged in every agency should be displayed prominently in its office.
I do not say that these things are not done already in the vast majority of private employment agencies. It is true to say that competition is very fierce and effective already. However, I believe that it is necesssary to include all agents and to make it quite clear what the rules are to be. It is also necessary to include in the Bill au pair girls, both those being placed abroad and those coming from abroad to obtain employment here, self-employed staff and all forms of staff and employment as at present. The Bill would not include management consultancy, staff contracting, nurses, and some of the other extraneous professions which were brought into a previous Measure which we considered earlier in the Session.
Some other provisions are necessary. The system of licensing by local authorities which exists can be built upon and made mandatory for all local authorities. I believe that that is better than central control. We should therefore make provision in the Bill for local licensing administered by local authorities.
There have, of course, been complaints about such things as misleading advertising, appropriation of clients' moneys and unfair charges, and declaration of interests by employment agencies—something which has been suggested in the past.

I wonder if many of these complaints could not be dealt with in companies legislation or other legislation, but it may be that they should be included in a Bill of this nature where they are peculiar to the profession.
I would emphasise, however, that if one is not satisfied with the service which one gets from any employment agency or labour exchange, the remedy always should be to go to another one which gives better service. This is the classical basis upon which our society was built, on which it developed and became the most powerful society in the world. Rather than go into a form of detailed regulation, control and interference in every day-to-day detail of employment agency work, the Bill tries to bring all of them—public, private, trade union, fee-charging and otherwise—on to the same basis and lay down rules of competition. That golden word is the way to protect the consumer, rather than trying to get the gentlemen in Whitehall to do the work for the agent.

Mr. Speaker: The Question is, That leave be given—

Mr. Hugh Jenkins: Mr. Hugh Jenkins (Putney) rose—

Mr. Speaker: Does the hon. Gentleman wish to oppose leave?

Mr. Jenkins: Yes, Mr. Speaker. I wish to oppose the Motion which the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) moves for leave to introduce this Bill. To hear him this morning, one would not think that he, perhaps more than any other hon. Member, is personally responsible for the fact that there is not an Act to regulate employment agencies on the Statute Book already, except, perhaps, for the rather doctrinaire note which he allowed to creep into his speech at the end of his remarks.
The vast majority of jobs are offered and obtained without the intervention of any sort of employment agency. Probably few hon. Members have ever paid anyone to find work for them, though a few may have paid agents to find shorthand typists or secretaries.
As distinct from an employment exchange which provides a service without charge to employers and employees, a fee-charging employment agency is parasitic by nature. This is demonstrated by the fact that the profit seeking agent is


only to be found in those areas of employment where there is either a shortage of work or a shortage of qualified workers. What is more, when there are many people seeking a few jobs, as in the world of entertainment, the agent makes his profit out of the employee. For example, most actors employed in the West End, in films and on television pay at least 10 per cent. of their wages to an agent, and not just for the first week of work but for every week throughout a run. On the other hand, the situation is arising in which more and more employers of secretaries and shorthand typists find themselves forced to pay an agent, again not only for the first week but for every week of so-called temporary employment.
If there was a general need for a service between employer and employee which warranted payment, that service would not only operate in conditions of shortage. The person charged would not always be the one in need. The employment agent is often no more than a means of exploiting shortage for gain, and this fact is recognised in many countries. Not only in Communist countries, as one might suppose, having listened to the hon. Gentleman, but in almost all European countries, including those in the Common Market, fee-charging employment agencies are prohibited. The suggestion that this recognition is in some way dictated by doctrinal considerations is false, though I suggest that the opposition directed at the earlier proposed legislation was so dictated.
In 1949 the International Labour Organisation issued a Convention which provided for employment agents to be abolished or regulated. Many countries have ratified the Convention and have chosen abolition. We chose regulation, and in 1951 the previous Labour Government announced their intention to ratify on this basis. They fell from office before doing so, unfortunately, but the Conservative Government who followed also announced their intention to do the same and, after long discussions, detailed the nature of the proposed legislation which was to be introduced. It was never brought into effect, but the Bill which I introduced and which received an unopposed Second Reading more than

a year ago followed in all essentials the pattern proposed by the previous Tory Government.
My Bill does not propose to abolish the fee-charging agent. It has never been my purpose to do that, because I think that, providing they operate under supervision and on an agreed basis, there is a useful function—

Mr. Speaker: Order. The hon. Gentleman cannot in this debate seek leave to reintroduce the Bill which he has already introduced to the House. He must oppose this Bill.

Mr. Jenkins: I understand, Mr. Speaker, and I apologise for straying from the rules of order. I was saying, in the wrong way, that an agent who does his job properly and is content with a reasonable remuneration for his services can perform a useful function, providing that his activities are kept within bounds. However, this proposed Measure will not have that effect.
Why did the hon. Member for Cirencester and Tewkesbury not support the previous Measure? Why did he put down so many Amendments—

Mr. Speaker: Order. The hon. Member must oppose this Measure. We are not discussing his Bill.

Mr. Jenkins: I am sorry, Mr. Speaker, if I have strayed once again. I was endeavouring to suggest that this Bill is unnecessary because there is already a previous Measure which is far advanced in the House. One of the reasons I was putting forward for opposing this Bill was the existence of the previous Measure. I recognise that I must touch only lightly on that, but I hope that you will not consider it entirely out of order that one of the reasons why we do not want this Measure is that there is the Measure to which I have referred, but I understand that you are telling me that I must not spend too much time on that.
I move from that and ask why the hon. Member seeks to introduce a new Measure. It was possible for him to amend, indeed he tried to amend the previous Measure and succeeded in some degree. Since my Bill is still before the House and will reach its conclusion this Session or in the next one, the hon. Member should be refused permission to introduce his Bill, which would not


merely be redundant but would be a "phoney" piece of legislation because it would pretend to deal with problems which it would not actually touch and would leave out matters which need to be dealt with.
The House should throw out this Motion with the contempt that it deserves. It is not a serious endeavour to deal with the problem of controlling employment agencies. There is a Bill already before the House which does that. I hope that the House will not confuse the issue by the introduction of a new Measure which falsely pretends to do something which is already in process of being properly tackled.

Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of Public Business).

Mr. Speaker: Objection having been taken and since a Division has been claimed, I am bound by paragraph 4 of the Sessional Order to declare proceedings on the Motion deferred until the end of today's business.

The Proceedings stood deferred pursuant to Order (Sittings of the House (Morning Sittings)).

Orders of the Day — CONTROL OF LIQUID FUEL BILL

Order for Committee read.

10.23 a.m.

The Minister of Power (Mr. Richard Marsh): I beg to move,
That it be an Instruction to the Committee on the Bill that they have power to make provision in the Bill for controlling the supply, acquisition and consumption of lubricating oil and grease and for extending the provisions of the Bill to the Isle of Man and the Channel Islands.
The purpose of the Instruction is to enable the Committee to consider Amendment No. 2 and New Clause No. 1 standing in my name. The Amendment is to provide for controlling the supply, acquisition and consumption of lubricating oils and grease. The new Clause is to extend the provisions of the Bill to the Isle of Man and the Channel Islands. At present the Long Title of the Bill refers only to the United Kingdom. The Instruction is therefore necessary to enable the Bill to be applied to the Isle of Man and the Channel Islands.
As to the control of lubricating oil, the Instruction is necessary because I am advised that this is not strictly covered by the subject matter of the Bill as received from Second Reading since it covers only liquid fuel and does not extend to lubricating oil. Without the Instruction, therefore, it is doubtful whether the Committee would have power to make provision for lubricating oil.

10.24 a.m.

Mr. Peter Emery: While I do not wish to delay the House for very long, before making my speech I do as I did on Second Reading—I declare an interest. I hope that I need not do this every time I speak. I declare that I have an interest in oil companies and I would want anyone to know that whenever I rise to my feet.
The position is quite obviously that a slight "boob" has been made by the Ministry in not looking at this matter fully from the word go. It would appear that the Ministry did not realise that the Isle of Man or the Channel Islands were part of their domain and under their control. This may not necessarily please the


people resident in those areas. I am certain that the Minister is right and I am glad that he has been able at this early hour, or late hour whatever it may be—I was in my place only a matter of two-and-a-half hours ago—to act with this expedition.
The lubricating oil factor I find a little strange because, as the right hon. Gentleman will know, I posed a direct question about this. It would not be unfair to say that the Parliamentary Secretary gave me a pretty short "brush off" in his reply when he said:
As far as lubricants are concerned, this is a question of fact, and I do not intend to try to define the particular point of fact that the hon. Gentleman was putting. Lubricants are lubricating oils, and if there should be any quarrel about it I think that this is a matter for the technicians."—[OFFICIAL REPORT, 6th July, 1967; Vol. 749, c. 2137.]
The implication was that I was wasting the time of the House and did not know what I was talking about. I am glad that the Minister has been able to correct this situation because, although there is no doubt that there is a large supply of lubricants and lubricating oil, it would be a nonsense for the Bill to go through without the Instruction. I ask him therefore—

Mr. Marsh: I hesitated before diluting the flood of eloquence at this stage of the proceedings, but the Motion I have moved will enable the Committee to discuss the Amendments which are on the Notice Paper.

Mr. Emery: I do not intend to continue the discussion other than to ask a question about the Long Title. Would this Motion mean that if it and the Amendments which the Minister has put down were carried he would alter the Long Title of the Bill? I urge that he should do so because on the whole he is quite right. Indeed—

Mr. Speaker: Order. I think this point might possibly be taken up in Committee.

Mr. Emery: If it is better taken up in Committee, I immediately stop. I will take it up in Committee because I think it relevant. I am pleased that the Minister has seen fit to get himself into order at the very start, and of course we shall support him in this enabling Motion.

Question put and agreed to.

Resolved,
That it be an Instruction to the Committee on the Bill that they have power to make provision in the Bill for controlling the supply, acquisition and consumption of lubricating oil and grease and for extending the provisions of the Bill to the Isle of Man and the Channel Islands.

Bill considered in Committee.

[Sir ERIC FLETCHER in the Chair]

The Chairman: The Committee will appreciate that until the House had agreed to the Instruction it was not possible for me to complete the selection of Amendments. It may be for the convenience of the Committee if I indicate which Amendments are being called. In addition to the Government Amendments and the Government new Clause, I propose to call Amendment No. 1, with which we can discuss Amendments Nos. 5 and 6. I then propose to call separately Amendment No. 9 and Amendment No. 12, in Clause 8, page 5, line 7, leave out '30th June 1968' and insert '31st December 1967'.

Mr. Edward M. Taylor: I presume, Sir Eric, that you are not calling new Clause No. 2—Regional development—which is supported by hon. Members from both sides of the House and which is the only Amendment which has more than two names attached to it.

The Chairman: I did not mention new Clause No. 2 because it is not selected.

Mr. Kenneth Lewis: On a different point of order, Sir Eric. The House has now sat for two successive nights and we are likely to have a late night tonight. I am certain that from the way in which the Leader of the House has arranged the business, deliberately, we shall have a late night tomorrow—

The Chairman: Order. We are in Committee now. I am not concerned with the sittings of the House. No point of order can arise in this Committee about the sittings of the House.

Orders of the Day — Clause 1.—(CONTROL OF LIQUID FUEL.)

Mr. Emery: I beg to move Amendment No. 1, in page 1, line 10, at the end to insert:
Provided that such orders shall not come into operation until they have been approved by both Houses of Parliament.
As we are now in Committee, perhaps I had better again declare an interest, and I hope that this is the last time that I shall need to do so.
10.30 a.m.
It was made clear on Second Reading that most extensive powers can be taken tinder the Bill. No one who wishes to see the proper allocation of fuel oil wishes to do other than give the Government power to ensure that if there is a shortage, the fuel oil will be fairly distributed to all consumers. In such distribution it is imperative that the public services, public institutions and other vital services of the country are properly looked after. Nobody would argue about that. But because the powers which the Minister can take are so all-embracing, it would be of benefit to the House and to the public to be certain before they came into operation of the manner in which And the organisation by which these powers would be used. I am not suggesting that the Amendment limits the Government other than making certain .hat the powers which the Minister wishes to take would be approved by the House. For example, the Minister might think of powers allowed by the Bill which he would never consider taking. Before any Minister brought specific powers into operation the House should have an opportunity to consider them and to approve them.
I know that a number of arguments Rill be used against the Amendment. I shall be told that this is not the position under the Defence Regulations or the Emergency Powers. But these are not Defence Regulations. This is an enabling Bill, and because it differs from the Defence Regulations it is wrong to try to create more and more precedents which allow extensive powers to be given 10 Ministers without the House having approved of the day-to-day operation of them. Surely that is why the House exists—to guard the rights which we give to the executive. I see no reason why the Government should not accept the

Amendment. It would be in their interests to make public the powers they want to take and to ensure that if there is criticism it can be voiced before the powers begin to operate. It is clear that under the present procedure there would be no action which the House could take before the operation of the powers.
If the Minister opposes the Amendment, will he at least put on record what he has in mind of the kind of powers which he wants and those which he does not want? How will he deal with such matters as the rationing of liquid fuel for transport in rural areas? This may be a small matter, but it is of vital importance in areas where bus services are irregular, and already there are major complaints about them. If the fuel for the operation of these services were cut, there would be major objections from people living in the area. What consideration has the Minister in mind for taxi drivers? I understand that they are to gather in the Lobby of the House later today. He should help people to be more certain of the general situation. We have to consider commercial travellers, doctors and others.
None of this was dealt with on Second Reading mainly because, for reasons of time, it was a short debate and it was felt that these points could be left to Committee. If the Minister will not accept the Amendment, what are the methods of rationing which he proposes to adopt? There is a variety of methods available. What are his general views about them. The Bill as it stands is no doubt of the greatest convenience to the Government, who can do whatever they like under it. It might even be argued that it is inconvenient for the House of Commons, because if my Amendment were accepted the House might have to be recalled to consider the affirmative Resolution. But when we talk about the convenience of the House, let us first think of the convenience of the British public. I say that even though no hon. Member would want to come back from his holidays. It would be wrong to put the convenience of the House before the convenience of the public, or before the right of the House to protect the public.
Reports from Libya, Kuwait and elsewhere suggest that this exercise will never have to be undertaken. We all hope that that is so. But if an Order had to be


introduced in the middle of September, we must bear in mind that it would be an extension in peace time of the rationing of a major commodity—a commodity which affects the life of practically everyone in the community—and the House should deal with such an extension by affirmative Order. Probably not all hon. Members would need to return.
Even the Government realise that an affirmative Order is a limitation on them. The limitation is that they have to be that much more careful about the powers which they take. Under the negative procedure they can proceed as they wish, and there is a fait accompli, but under the affirmative Resolution procedure they have to consider carefully before powers are introduced. I feel that in the Amendment we are protecting the Government's interests so that no one will be able to criticise them for adopting an all-embracing measure of control. The Government should take the powers they want in an affirmative Resolution which the House would approve. The House should have the right to consider any minor points or major extensions of powers which it might think wrong in certain circumstances.

Mr. Kenneth Lewis: Further to the point of order which I raised a few minutes ago, Sir Eric, when you stopped me in full flight, I was rather taken aback as I did not think there was any difference between raising a point of order in Committee and raising it in the House. If you will listen to what I have to say, it may help you and it will probably help me also,
I shall not repeat what I said before, but I should like to point out that the situation is very serious. We are trying to run the House almost on a 24-hour basis, and the strain on the staff, the police and all the Officers of the House is completely and absolutely intolerable because of the way in which the Leader of the House has organised the business. Therefore, I believe it is necessary that when we have a morning sitting there should be relief for the staff. I suggested this, Sir Eric, to the Leader of the House at 6 o'clock in the morning two days ago—

The Chairman: Order. I really cannot allow this. This is not a point of

order which can be raised during this Committee stage.

Mr. Lewis: I am coming to the point of order—

The Chairman: No, the hon. Member cannot. I have ruled that this is not a point of order which can be raised in this Committee.

Mr. Lewis: Mr. Lewis rose—

The Chairman: Order. The hon. Member has heard my Ruling. He must observe it.

Mr. Lewis: Sir Eric—

The Chairman: No, the hon. Member must not dispute my Ruling.

Mr. Lewis: Mr. Lewis rose—

The Chairman: Order.

Mr. Lewis: I beg to call your attention, Sir Eric, to the fact that strangers are present.

The Chairman: The Question is, "That strangers do withdraw".

Question put and negatived.

Question again proposed, That the proposed words be there inserted.

Mr. Eric Ogden: There is a natural inclination on this side of the Committee to view with a certain amount of suspicion and caution Amendments moved by hon. Members opposite, particularly when they are moved with such vigour after the kind of sittings that we have had during the last two days. However, I will concede right away that there is a degree of merit in the Amendment which has been moved by the hon. Member for Honiton (Mr. Emery). His argument is that if things were done in the way proposed in the Amendment, the Government would have to come to the House—

Mr. Nicholas Ridley: On a point of order, Sir Eric. I understand that the bells are ringing in the House. Can you enlighten me why that should be? Is there a Count, or a Division, or has the House adjourned?

The Chairman: I have no idea why the bells are ringing. I will have inquiries made. Mr. Ogden.

Mr. Kenneth Lewis: Further to that point of order, Sir Eric. Are we to have


a vote on the Motion "That strangers do withdraw" later in the day? Surely we cannot have a vote late at night on whether strangers be ordered to withdraw during the day time.

The Chairman: The Committee has decided. I put the Question to the Committee and I collected the voices. Nobody voted in favour of strangers withdrawing. A number of voices voted against it. The Committee, therefore, decided that strangers should not be ordered to withdraw.

Mr. Ridley: Further to that point of order. If the Committee had wished to have a Division on whether or not strangers should be ordered to withdraw, how could it have had that Division if a Division cannot take place until the end of this sitting, which might be in the early hours of the morning? This raises a major constitutional difficulty for the House. If it were the wish of hon. Members that strangers be ordered to withdraw, the House could not express a decision in the matter until strangers had been present for a further 12 or 15 hours after the House had wished to have a Division. This is a difficult matter, Sir Eric, and I would be grateful if you could give a ruling on how the House could proceed in such a case.

The Chairman: The hon. Member realises that his question is purely hypothetical. I will certainly consider what the position would be if such a hypothetical situation were ever to arise. Mr. Ogden.

Mr. Ogden: Thank you, Sir Eric.
10.45 a.m.
It might be useful to remind the Committee that I was about to express a certain amount of agreement with the hon. Member for Honiton. He almost lost my sympathy by speakin4 so cheerfully and vigorously at thin time of the morning. However, I will concentrate on his case rather than on the way in which he presented it. If his suggestion were adopted, then should the Government decide that it was necessary to use the powers that we are presumably going to give to them, they would have to come to the House and explain why they thought it necessary to introduce these powers, and part of that explanation would consist in proving that they had

done all they could to avoid having to use the powers. We on this side of the Committee trust the Government to do all that is necessary to avoid using the powers. We do not believe it to be necessary for the Government to come to the House and report what they have done.
Perhaps this morning, either on this Amendment or on Third Reading, we may be given some information about the state of our reserves. Perhaps we may be told what change there has been in purchasing fuel in different parts of the world in order to maintain our reserves. I understand that at the moment we have lost about 20 days' supply. The Minister is asking for very strong powers, and we should like some indication from the Government of their thinking in the matter of replacing supplies before finally granting these powers to the Government.
I wish to draw a comparison between the fuel situation in the country today with the situation about 12 months ago when, because of the seamen's strike, there were difficulties in obtaining fuel supplies. Certainly in the south and south-eastern power stations there was an efficient operation by which oil, which we were having great difficulty in importing, was substituted for coal. If the Minister is saying that he is considering the necessity to restrict liquid fuel, he should indicate how he is going to maintain supplies of fuel and substitute them for our own indigenous supplies. My information is that at the moment the amount of oil burned in the south-eastern power stations is 25 per cent. more than last year. This is a large amount at a time when I would have thought that the oil consumed in the power stations should be reduced and replaced by our own indigenous fuel. I should also like to know whether there is a possibility of replacing oil with gas.
If it becomes necessary to introduce rationing, it will have to be done quickly. The implementation of the decision will have to follow very speedily. It will be no use putting on the Order Paper an Order introducing rationing and then debating it some time later. I should like the Government to explain these two points—what they are doing to save our fuel, and what they will do to safeguard against a gap between announcing a


decision to ration fuel and then implementing that decision.

Mr. Ridley: I support the Amendment moved by my hon. Friend the Member for Honiton (Mr. Emery).
The Amendment, Sir Eric, which you have said may be discussed with this one is in similar terms and has the effect of changing the negative procedure to the positive procedure in the event of an Order being made to introduce petrol rationing. This would mean that if it were decided during the Recess to bring in petrol rationing, the Government could not do so unless they recalled Parliament to get the Order passed. But there are still two or three weeks before the House rises in which the Government can make up their mind. It is important that they should make up their mind in the next two or three weeks about whether we should have petrol rationing. If they are unable to make up their mind before we rise for the recess, it would be only right for Parliament to be recalled if, having dithered for another three weeks, they decided that petrol rationing should be introduced while Parliament was in recess.
There are two important points which the House would have to consider if a decision were taken to lay an Order introducing petrol rationing. First, it would have to consider what form the rationing should take—whether there should be a basic ration and a small supplementary allowance, or a small basic ration and a large supplementary allowance. It would have to be decided how much the ration should be and there would be a mass of detailed administrative questions about the form of rationing. There is, however, a much more important consideration, and that is whether the Government would be right, in view of the political situation in the oil-producing areas, to introduce petrol rationing.
It is a terrible admission of failure that, in a period of over-supply of crude oil, and when wars are confined to the Far East, we should be humiliated by having to introduce petrol rationing again. The House would be wrong to allow the Government to proceed with petrol rationing without knowing why it was necessary.

Mr. Marsh: The hon. Gentleman talks about the Government introducing petrol

rationing "again". The Government are not introducing petrol rationing. Can the hon. Gentleman remember when petrol rationing was last introduced?

Mr. Ridley: The last time was when there was a very similar Middle Eastern crisis. It is food for reflection that, although they have tried to take a detached view of the Middle Eastern conflict, the same conclusion has been reached that it may well be necessary to introduce petrol rationing. I hope that we can all agree that the theory that our military operations in the Middle East or anywhere else have the effect of protecting our sources of supply can no longer be held.
The House would need to know before agreeing to an Order what the stocks were and what the supply position in the major supplying countries was. We have been given far too little information about the stocks and the extent of the cut in supplies. I can understand that some of this information is confidential and that it would not perhaps be wise to divulge all the information, but I hope that the Government will give the House the maximum possible amount of information about the supply position and also any information which they can properly release about their negotiations with the Arab countries.
It may be that it is a justifiable risk not to introduce petrol rationing because if the gap between supply and demand is very small or, in the opinion of the Government, will not become large, it can probably be dealt with by increasing the price of petrol. Increasing the price by only a few pence would have the effect of cutting consumption by a certain amount. If the gap were very big and there were an enormous shortage, rationing would be not only right but desirable. When rationing was last introduced, 1s. was put on the price of a gallon of petrol. The present increase is only 2d. Although the consumption of petrol will not be greatly discouraged by the price increase, before agreeing to petrol rationing, I should wish to be satisfied that temporarily raising the price will not do the trick.
It is clear that prices would have to go up, because if there were rationing and a consequent large cut in the consumption of petrol, the Revenue would suffer


drastically as an enormous amount of excise revenue would not be received due to the cut in consumption. It is fair to ask the Minister how he foresees this difficulty being overcome. Therefore, I ask the Minister to tell us a little more about the Government's intentions about the price of petrol.
The hon. Member for Liverpool, West Derby (Mr. Ogden) said on Second Reading:
I hope that I am wrong but I do not believe that this is the last time we shall have difficulties over oil supplies from overseas."—[OFFILIAL REPORT, 6th July, 1967; Vol. 749, c. 2132.]
This is an intolerable position for us. As the Minister said, it is not long since we had a similar threat to our supplies. Now we have another, and the hon. Member for West Derby fears that we might have a third at some unspecified time. It is wrong that this country should continue to be in such a position that its petrol supplies are at risk. But it is not surprising when one considers tale situation.
In the first quarter of this year, 57 per cent. of our crude oil supplies came from east of the Suez Canal and had to go through the Suez Canal. Of the total supplies, 74 per cent. came from the Middle East. I understand that during the latest crisis about 67 per cent. of our oil has been cut off. Now that the Nigerian oil has been cut off, if indeed it has, that adds a another 10 per cent., making the fantastic total of 77 per cent. of our crude supplies being interrupted at one time. Perhaps nobody could predict that we should lose both the Middle Eastern and Nigerian sources, but it is fair to point out that there should be far greater diversification of our oil supplies. I know that we are doing all that we can to achieve that, but I hope that the Government will take seriously the need to widen the areas of supply so that we are not again in a position in which 77 per cent. of oil supplies are cut off at one go.
I am one of those who do not believe that economic sanctions should be used for political ends. This is what has happened to us. We have been the victims of savage economic sanctions because we are thought to have backed one side or the other in a dispute in the Middle East. We are merely having done to us what we have been trying to

do to other people in the world. I hope that we can learn the lesson from this that economic sanctions are not the way to implement one's political beliefs. We have only ourselves to blame because we were the first to start it. I hope that the lesson will be learned that once a responsible commercial nation of this sort leads the way on a course of economic sanctions, blockade and economic warfare, it has only itself to blame if the same weapon is used against it, as it was used 10 years ago and as it has been used on this occasion.
I hope that the Government will tell us some more about the stocks position, about the negotiations position and what they will do when the oil flows again. I hope that we shall hear what the chances are of petrol rationing and that we shall find other ways to protect our sources of supply and will diversify and broaden the basis of supply so that we are not again at the mercy of economic sanctions imposed by régimes which wish to express political disapproval by rather cheap, petty ways such as this.

11.0 a.m.

Mr. Eric G. Varley: Most hon. Members present have been up all night, and I do not wish to detain the Committee for very long. I wish merely to reinforce the points made by my hon. Friend the Member for Liverpool. West Derby (Mr. Ogden). If the Amendment were incorporated in the Bill, the Minister would have to tell us what he proposed to do in any subsequent rationing scheme and what the effects would be. He would have to demonstrate the necessity, and that the allocation of liquid fuel was to be determined fairly and equitably. He would also have to tell us where there could be savings.
In considering how far liquid fuel could be saved, it will be necessary to examine the existing areas of industrial activity to see if there are substitute fuels for oil. As my hon. Friend said, there are two examples of the present use of oil where there is a substitute. Power stations are one, and coke ovens are the other. We are told that oil to the extent of about 12 million tons of coal equivalent goes into the power stations. I am advised that it would not be very difficult for this to be changed to coal if


rationing became necessary in an emergency. I am also told that the use of oil in coke ovens for the manufacture of gas is equivalent to about 16 million tons of coal. Changing to coal would be a much more difficult technical problem in this case, but I am told that 1 million to 2 million tons of coal could be used as a substitute.
Will my right hon. Friend tell us where he could make savings if rationing became necessary, and if there has been any thinking in the Ministry on these points? The use of coal as a substitute for oil to the extent of 12 million tons coal equivalent in power stations would be a considerable saving, and I think that it could be made. Similarly, a small saving could be made in the manufacture of gas. I understand that both these things would require only a direction by my right hon. Friend. No elaborate machinery, no Acts of Parliament, and no enabling Measures would be needed. He would have only to issue a direction to the Central Electricity Generating Board and to the Gas Council.
I should be very grateful if my right hon. Friend could give us some information on these points.

Mr. Edward M. Taylor: It is always a pleasure to follow the hon. Member for Chesterfield (Mr. Varley). Knowing how conscientious he has been in all the all-night sittings, I feel that it is a tribute to him that he can speak with such fluency. But it is unfortunate that when we are considering such an important Amendment to such an important Bill only a small number of hon. Members is present. This is a reflection on the total incompetence of the Leader of the House in organising business. It is very unfortunate that as a direct result, in his absence, we must discuss the Amendment in this way.
We have put forward the Amendment because under the Bill the Government will have very wide-ranging powers which could affect everyone. It is rather surprising that since Suez the numbers of car owners have increased so dramatically in this country that more than one family out of two now has a car. The powers in the Bill and the regulations which will stem from it will affect every person in his pleasure, business and so on.
This is why it is very important that when the administrative arrangements are determined and the Minister decides how the powers will be used, we in the House, as representatives of the people, should have an opportunity to give our views. I have nothing personal against the Minister, but if there is a wrong way in which things of this sort can be done the Government seem to choose it. Our real fear on petrol rationing is that they may make a serious blunder. The chance of making it will be greatly minimised if the arrangements will be ruthlessly probed by gentlemen like my hon. Friend the Members for Honiton (Mr. Emery) and Cirencester and Tewkesbury (Mr. Ridley). If the arrangements are subjected to the ruthless probing of these and other interested hon. Members, the chances of a mistake will be minimised.
I hope that the Minister will not think that we have any fear that he has dictatorial ambitions, but it is rather surprising that this week we have had news that alone amongst all sections of industry the nationalised power industries have increased the number of their employees over the past year. The Minister has taken over a considerable part of industry through the nationalisation of steel, and only yesterday he was engaged in discussion with the Home Affairs Committee of the Labour Party on nationalising North Sea gas.
Will the rationing powers be used in general because of the oil supply position alone or because of a deterioration in our balance of payments resulting from the purchase of alternative supplies? If there is a danger of their being used because of a deterioration in our balance of payments it is all the more important that they should be subject to affirmative procedure. If they will be used only because of a physical shortage of petrol there is little likelihood of their being used during the long Summer Recess. But I believe that the Government could have in mind that they may have to ration petrol because of a shortage of dollars or other foreign currencies needed to pay for alternative supplies.
My second question is whether, apart from suggesting that the power stations should convert to coal, the Government are putting a stop on the present proposals to change from coal burning to oil


burning, particularly in the gas and electricity industries. One such proposal is being considered in Scotland at present, and it is important to know whether plans for conversions are being held up at present. They should be held up in the rational interest.
The third question was brought to my attention by my hon. Friend the Member for Plymouth, Devonport (Dame Joan Vickers). She was hoping to be present to put this point herself but she is chairing a Committee upstairs. When they come to use these powers, will the Government avoid the mistake made on the last occasion by failing to apply the powers to driving schools? The Minister will remember that, on the last occasion, driving schools were deprived of their ration, and learner drivers were permitted to drive unaccompanied. There is a real danger in this. I hope that this mistake will not be made again.
In considering whether there should be affirmative or negative procedure, it would help if the Government would indicate what their views would be about this question of driving schools. It would he important to ensure that the schools had an adequate ration of petrol, so that learner drivers were not allowed to drive unaccompanied. All driving tests should not be discontinued, and the Ministry of Transport could utilise its register of approved instructors to help with cases of people being required for other duties arising out of the emergency.
One argument which could be effectively used against the Amendment deals with delays. If we were to announce an order which had to be approved by the affirmative procedure it is just conceivable that in the interim there might be a furious buying of petrol which would undermine the purpose of the order. Two things can be said about that. I have never been impressed with stories of hoarding, because there are limits to the amount of petrol that people can buy, put in their tanks or store safely. Perhaps the argument has been overplayed, although I appreciate that it has some validity.
My hon. Friend the Member for Cirencester and Tewkesbury very reasonably suggested as an alternative that we should hive an opportunity of discussing the Order within a limited period of time. We are not wanting to disrupt the Bill

and overturn its provisions. We simply want to make sure that there will be a guaranteed opportunity of a very speedy discussion of these proposals. The Government could do something foolish and wrong, and their chances of doing so would be greatly reduced if we had an immediate opportunity of discussing this.
We would want to have an opportunity of discussing the Government's arrangements very soon indeed, particularly the administrative arrangements for carrying out the rationing of petrol. This could be a considerable exercise, and I hope the Government will tell us what will be involved. How many men will be employed? How much expenditure will take place? We have been very disappointed that in recent Government decisions about employing additional civil servants and setting up new offices the responsibilities for regional development, particularly as applied to Scotland, have been neglected. Recent decisions which have gone against us include the computer centre, the National Steel Corporation and the Vehicle Licence Duty Office.
In considering whether to have affirmative or negative procedure, one thing which would weigh heavily with me are the administrative arrangements which the Government would decide upon. I hope that they will bear in mind their particular responsibilities in this area. There is a better chance of their doing so if these Regulations are subject to the affirmative procedure. If this is not so we will have to rely on the good judgment and views of the Minister. We need something more than that. We have to have some kind of guarantee that there will be a speedy or immediate discussion of these matters.
In those circumstances I hope that the Government will accept the Amendment. If they do not I hope that they will come to some procedural arrangement or understanding whereby we can have a guaranteed early discussion of these matters. If we do not have this I will not be satisfied, and I fear that the Government will do the wrong thing in the wrong way.

11.15 a.m.

Mr. Marsh: This has been a rather longer debate than I had expected, but, as the hon. Member for Honiton (Mr. Emery) said, the powers contained in this


Bill are unusual for any Minister to have in a democratic society. The circumstances at the moment are somewhat unusual and the Government need these powers. There has been a tendency as the debate has continued for hon. Members to talk as if we were discussing the introduction of rationing. We are not. No proposals have been made for rationing and the Government have no suggestion for rationing at the moment. None the less, if it had to come into operation it would clearly be sensible that some machinery should exist.
I was asked a number of questions, on some of which I shall be less forthcoming than on others. Hon. Gentlemen ask for details of the current stock position and the sources of supply. I have nothing but admiration for their desire for knowledge, but I can be rather less than forthcoming on some of these points. This is the sort of debate which, while it may not attract a large audience here, may well have its proceedings read with great interest in other parts of the world.

Mr. Edward M. Taylor: There is plenty of coal.

Mr. Marsh: We certainly have plenty of coal. That is something of an understatement. All preparatory measures are being taken. It is more difficult to start too late. We have printed and are printing vast quantities of coupons; we are dealing with the provision of accommodation, the selection of key staff, the posting of advance parties to regional offices to get things ready for rationing should we need it. I stress "should it be needed".
The main body of staff will not be moved until a firm decision has been taken to issue the ration books. Even the issuing of the books does not necessarily imply that the decision to ration is irrevocable. In any event, rationing cannot be introduced until some weeks after these procedures. What we are doing, very prudently, as a House, is saying: "Here is a situation which is extremely inconvenient—certainly not disastrous—and which could, at some unspecified date in the future, result in the need for rationing".
Rationing in this country is a very large-scale operation. One hon. Gentleman asked for some information on the

figures involved. At the time of Suez, when we had 4 million cars on the roads, it took a staff of 1,800 people. I hope this time to do it with something like 2,500 staff. I hope that most of them would come from within the service, rather than build up an outside bureaucracy. It is a very big exercise in a country as heavily populated as ours.
A number of specific points, including questions of fuel policy, coal-burning gasworks, and a possible conversion of electricity power stations, were raised. One of the many things to remember is that we are dealing essentially with a short-term crisis which, strangely enough, is not primarily an oil shortage crisis. This is something which is misunderstood. There is a great deal of oil in the world. The problem that we have is not so much a shortage of oil but of transport, involving the cost of getting it here and the physical job of doing so. It is also a very short-term problem. I do not under-estimate the strong feelings of some of my hon. Friends who will no doubt find themselves speaking, probably on Monday, about the position of the coalmining industry.
Whatever arguments there may be for converting oil-burning power stations to coal, there are fuel policy questions on which it would be foolish to take decisions of a long-term and very expensive nature on the basis of a crisis lasting probably a matter of weeks. However, this does not detract from the argument which could be deployed at considerable length on another occasion.
The Amendment is very understandable in a democratic society. It is proposed to take powers, which could be very serious and far-reaching, virtually by issue of decree. It is right for the House to be concerned about this. But if the proposed procedure were adopted it would mean that nothing could be done until the House was recalled, and it might have to be recalled not once but on a number of occasions. There is a host of possible Orders, none of which need necessarily imply a decision on rationing. Orders might have to be taken to assist us in avoiding rationing.
The procedure outlined in the Bill is that adopted during the Suez crisis when the provisions were made under Defence Regulations. There are no wider or less


closely defined powers involved in the Bill than were involved then. But the strongest argument against the Amendment is that if we had to give probably a fortnight's notice of the introduction of an Order the intention behind it might be frustrated.

Mr. Emery: I am sure that the right hon. Gentleman would not want to leave the House in any misapprehension. He suggested that the powers were the same as those used after the previous Middle East crisis when the Motor Fuel (No. 2) Order, 1956, was introduced. There is a major difference. The powers then employed were under Defence Regulation 55A, but the right hon. Gentleman is suggesting that he should have an enabling Bill so that he can use the specific powers which the Bill would give him. It is wrong, surely, to suggest that the procedure is the same. The Orders under the Defence Regulation were long and extensive and set out all the queries that we are now talking about. Then one knew where one was at the start. But we do not know where we are with the enabling Bill.

Mr. Marsh: The hon. Gentleman misunderstood me. I am not claiming that the powers are the same. I am saying that the Bill does not give the Minister any greater powers than he had at the time of Suez. I appreciate that the circumstances were entirely different, but now that the Defence Regulations have gone we are faced with the simple alternative either of proclaiming a state of emergency and taking emergency powers under the Emergency Powers Act, 1920, or producing an enabling Bill. We have chosen the Bill as the least drastic of the alternatives. My prime point is that by their very nature the Orders that might have to be issued are not the sort for which we could give a fortnight's notice.
I appreciate that something would be seriously lacking in the House if powers of this sort went unchallenged. I understand the doubts expressed on both sides of the House, and agree that it will be for the Government clearly to justify any steps that they take. However, we are not necessarily talking about the introduction of rationing. Nevertheless, I think that hon. Members on both sides would agree that, given the present circum-

stances, it would be highly dangerous and thoroughly irresponsible for any Government to go through the summer without the ability to take these powers if they were required. I emphasise that it would be dangerous and rather impracticable to think that these were Orders of a type of which we could give a fortnight's notice, trusting that in the meantime no one would do anything to frustrate our intentions.
I understand the Amendment and have sympathy with the intention behind it, but I think that these are circumstances in which the Government are entitled to ask the House to give them powers for which they would not otherwise be justified in asking.

Sir Keith Joseph: I hope that my hon. Friends will appreciate the Minister's attempt to meet their case. I confess that I saw some force in his argument. However, what he said has confused me in one important respect. He said that if the Government used the powers under the Bill they would not necessarily be for the purpose of introducing rationing.
What Orders might the Government be introducing under the Bill which would not be for the purpose of rationing? We grant that there might be Orders of a kind that would be frustrated if given too much notice. On the other hand, we should be very wrong to think that liquid fuel is used entirely in transport. It is an indispensable source of energy for a whole range of industries and utilities. The people in charge of those industries and utilities will need some warning if their source of supply is to be altered. How will the right hon. Gentleman reconcile, on the one hand, the need not to give too much notice so that his plans might be frustrated and, on the other hand, the need to give warning to citizens of all sorts in industry, agriculture, commerce, utilities, public services and private life that their source of supply is to be altered? Many of us would be grateful for a little more guidance on this.

Mr. Marsh: The right hon. Member for Leeds, North-East (Sir K. Joseph) is right when he says that many different products besides gasolene are involved


and that there are many different classes of consumer other than motorists.
The Bill gives powers for general Orders and particular Orders. Circumstances could arise where a product was in short supply to a very small group of people. In those circumstances the Minister would have power, for example, to direct that supplies should be made available for that purpose. There might then be an attempt by the person so directed to avoid the direction by increasing the price of his product—I am citing a purely hypothetical possibility—to such an extent that it would be impossible for the prospective buyer to purchase. In those circumstances the Minister has power under the Bill to direct that the price shall be a reasonable one. These are the sort of possibilities which could arise—they might well not—which would not of themselves justify introducing total rationing throughout the community.

Mr. Emery: I thank the right hon. Gentleman for his reply. I realise his difficulty. We do not want to thwart his ability to be able to control the situation. My hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor) introduced the most important question whether the Government would think of using these powers in connection with the balance of payments position rather than supplies. I hope that that will not be the case, but the Minister should tell the House what he has in mind, or let us know that he is not willing to reply.
The Minister used the very strange argument that if the Amendment was passed the House would possibly have to be recalled on a number of occasions because of the need for different Orders. I have a great regard for the Minister's administrative competence, but it would be administrative incompetence of the greatest order if, having put the Order before the House to take specific steps, he did not ensure that he was covered so that he did not have to recall the House. The Minister's Department and staff have the highest reputation for working in close co-operation with industry. They are the people who usually get the brickbats—never any praise—but

I do not believe that his staff would allow him to be so administratively incompetent as to have to recall the House on a number of occasions.
The hon. Member for Liverpool, West Derby (Mr. Ogden) mentioned the specific point of the time between the administrative resolution being tabled, the recall of the House, and the action taken. The Minister argued that it was necessary to be able to act quickly and that rationing could not be implemented until some weeks after the decision was made. There will therefore be a gap between the decision being made and the setting in operation of the whole machinery.

Mr. Marsh: The hon. Gentleman is missing the point. It is possible to need to introduce the Orders—this is all sheer hypothesis—without necessarily requiring rationing.

Mr. Emery: I see that point. The hypothetical example which the Minister gave was a sudden increase in price on a specific factor. The Minister suggested that if there were a shortage of naphtha, for example, there would need to be some control on its use and he decided that the price factor would be the answer. I believe that the industry itself will wish to co-operate in close working with the Ministry to make that sort of thing unnecessary. The only Orders the Minister will have to make are for major controls, because I think there will be this delaying factor.
I remind the Minister of three points: the balance of payments, the administrative situation of having to recall Parliament, and the possibility of informing the House by a negative resolution Order or giving some publicity to the way that the operation would take place if it were necessary. We are worried that the Minister might overstep the mark. I hope that this will not be the case. I do not go as far as my hon. Friend the Member for Cathcart went in saying that the Government always do everything in the wrong way. It is a fairly strong political argument which had some current relevance during the last six weeks, but let us presuppose in this instance that this would be the exception that proved the rule.
To meet our point, will the Minister consider giving some outline to the Press—it need not be to Parliament—spelling


out some of his ideas to meet the criticisms and perhaps suggest the powers which he did not want to take? If he could give some favourable answer on the points which have been raised we might be able to proceed without pressing this matter further.

Mr. Marsh: On the question of introducing rationing for balance of payments purposes, the House will be tired of hearing me say that we are not talking of introducing rationing. I cannot say what at sort of hypothetical situation might exist in two, three, or four months' time or which series of factors would motivate the Government at any stage. The Government's financial position is rather stronger than that—that it should be affected by it at the moment—but these are issues for my right hon. Friend the Chancellor.

Sir K. Joseph: Is the Minister going bask on what his hon. Friend the Parliamentary Secretary said in answer to a question from me on whether there is freedom for the oil companies to bring in as much oil as actually required? His hon. Friend said:
The answer to that is that there are no restrictions on the oil companies in this connection."—[OFFICIAL REPORT, 7th July, 1967; Vol. 749, c. 2136.]
Is the Minister saying that there is any change in the foreign exchange position of the oil companies since the Parliamentary Secretary spoke five days ago?

Mr. Marsh: I am obviously expressing myself badly this morning. I am trying to explain the precise opposite. We are not suggesting, nor are we asking for, any restrictions at the moment. All we are talking about is a Bill which we may never need—and I hope we will not—but which we could conceivably need at some period of weeks or months in the future. We do not face any great balance of payments crisis nor any great oil supply crisis, but we do face a very real transport problem. The point is that all these things are sheer hypotheses. We are asking for an enabling Bill because of what could conceivably be the position at some stage in the future. I would not want any panics to start on anything, because this is not called for in the Bill.
The hon. Member for Honiton raised the question whether we might want to recall Parliament for more than one Order. I am faced with the position that it is a matter of judgment. I do not know what the position will be in August, September, October or early November, although I could make a number of reasonable assumptions. Things could change very rapidly in this area of the world, and if they changed rapidly the Government would have to move rapidly and there would be no point in the House complaining about being called back twice.
The hon. Member asked me to spell out how the operation would take place and to give a list of powers in the Bill which I should want and a list of powers which I should not want to use. I hope not to use any of them. Which powers were used would depend on the position that existed when a crisis emerged. We might well with luck get through with nothing at all, and then the whole of the exercise will have been, in one way, a waste of time. We might, on the other hand, want some powers later just to deal with certain areas of the problem. Conceivably something catastrophic could happen. The hon. Member can go on working out the possibilities. I cannot tell him which scheme will be introduced to meet them because I do not know what they are.
I am saying on behalf of the Government that I want the powers in the Bill which will enable me to meet any situation which arises. I realise that this is asking for a lot and that it is right that this sort of power should be challenged when the Minister asks for it, and that he should be expected to justify his request.

Mr. Emery: We have some undertakings from the Minister on this matter. I hope that he will consider the point about publicity even further, but on those undertakings, and as we have other Amendments to consider, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. Marsh: I beg to move, Amendment No. 2, in page 2, line 3, at the end to insert:
(4) Any directions given to a person under subsection (3) of this section may include


provision as to the persons to whom he is to supply any such lubricating oil as may be specified in the directions; and any such directions may in particular require any lubricating oil to be supplied to such persons as may be specified in the directions in accordance with such requirements as may be so specified or may, to such extent as may be specified in the directions, prohibit the supply of lubricating oil to persons so specified.

The Chairman: It would be convenient at the same time to discuss Amendments Nos. 3, 4, 11 and 13.

Mr. Marsh: The Amendment is designed to enable me to include provisions for lubricating oil in any of the directions given under Clause 1(3) to suppliers or refiners of liquid fuel. On the best legal advice I have, I understand that liquid fuel does not include lubricating oils since they are not used as fuel, but it is possible, because of the relationship between the two, that supply difficulties which affect petroleum products used as liquid fuel may also affect lubricating oils at the same time. For example, any reductions in the use of other products would automatically effect the demand for lubricants, but it cannot be assumed that there may not be cases in which it would be necessary for the Minister to direct that particular consumers of liquid fuel should also be kept correspondingly supplied with lubricants or conversely other consumers should have their supplies of lubricants restricted. The Amendment is merely to ensure that lubricants are also included in the Bill.

Mr. Edward M. Taylor: Would the Minister between now and Report look carefully into the second part of Amendment No. 2 and also subsection (3), which is in similar wording? Will he see whether he can find a simple way of expressing the point? The phrase reads,
and any such directions may in particular require any lubricating oil to be supplied to such persons as may he specified in the directions in accordance with such requirements as may be so specified or may, to such extent as may be specified in the directions, prohibit the supply of lubricating oil to persons so specified.
There must be a simpler way of expressing that and I hope that he will try to find it.

11.45 a.m.

Sir K. Joseph: Will the Minister answer a point which he did not answer on Second Reading—whether lubricating

oils or liquid fuel—used in the Bill—include liquid petroleum gases?

Mr. Marsh: Yes.

Amendment agreed to.

Further Amendments made: Amendment No. 3, in page 2, line 4, after 'fuel', insert 'or lubricating oil'.

Amendment No. 4, in page 2, line 6, after 'fuel', insert 'or lubricating oil'.[Mr. Marsh.]

Question proposed, That the Clause, as amended, stand part of the Bill.

Sir K. Joseph: The Minister said "Yes" in answer to my question on Amendment No. 2, but, as reported in column 2138, his hon. Friend said that naphtha is not a liquid fuel—and the Bill deals with liquid fuels. How, then, can the Minister answer so categorically that liquid petroleum gases are included? Are they covered by the Bill?
Will he tell us whether he can give us any further information about the last word of the Clause? He takes power to dictate that the price shall be "reasonable" in any circumstances in which he makes arrangements for fuel to be supplied, but the word "reasonable" is very ambiguous. There are precedents in other legislation for some definition of the word or some arbitration to be attached to it. I am thinking particularly of the Clean Air Act. Can the Minister tell us how he would judge the price as being reasonable and whether in taking power under the Bill he will lay down some arbitration procedure?

Mr. Emery: I put two questions to the Parliamentary Secretary on Second Reading and he did not want to answer them then. The Minister has therefore had notice of the questions.
When the oil companies were going out of their way to bring in supplies to meet their existing contracts, two situations could arise. One is that, because of their desire for a good relationship with their customers, they would go out to buy or charter, at a considerably greater cost, oil to meet their contractual obligations.
If the Minister directs that oil elsewhere, the company having paid the extra money to meet their contractural obligations, often they still cannot meet


them because the Minister has directed the oil to meet some public need—and I do not quarrel with that. The oil companies, through good will, have spent more money than would normally be considered appropriate, and the extra cost should be paid to the oil companies when the Minister directs the oil elsewhere.
My second question is directed to the liability of companies in circumstances when it might be proved that they had supplies to meet their existing contracts but they were then directed by the Minister to move their oils elsewhere, Their breach of contract would then be by direction of the Minister, not by their own intent. Such a case may be thought unlikely, but it is possible. I hope that the Minister will give an assurance that a company would not in those circumstances be held responsible, particularly financially responsible, because of the Minister's action in directing the moving of the oil elsewhere.
Although I had intended to raise the question of liquid petroleum gas on the interpretation Clause, I think it convenient to raise it now and have it resolved. There has been a slight mix-up about 1.p.g., and there has been considerable doubt in official circles on whether it should or should not have been excluded. The Parliamentary Secretary will know what I mean by that. Are we to take it that 1.p.g. or propane is included? Is this ethane and methane, of is it not? Does it mean that the Minister has included naphtha or not? These are technical questions, but I should be glad to have answers about those gaseous feedstocks which are fuels.

Mr. Marsh: The right hon. Gentleman the Member for Leeds, North-East (Sir K Joseph) asked about the Minister's powers to fix a reasonable price. The Bill provides that the price shall be reasonable. What is reasonable can be decided only by the courts. But the circumstances in which these powers would be used are fairly narrow. They arise only in the case of an Order under this Clause, and the matter would depend very much on circumstances. Perhaps a person directed to supply to a particular consumer might be justified in expecting more for his product, but he might well

not be justified in quadrupling his price with the deliberate intention of ensuring that the other person could not purchase it even though he had been directed to supply it. I think that the question should be capable of solution fairly easily.
The hon. Gentleman the Member for Honiton (Mr. Emery) raised an interesting point about how far the Government would carry responsibility for losses incurred by companies which found themselves in legal difficulties with their customers as a result of directions issued by the Minister. Presumably, in such circumstances, the person would be acting within the law in that he had been given a straight Governmental direction. On the other hand, on the question of what happens if the Government require a particular supplier to divert supplies elsewhere and he is thereby put to further additional cost, it would be highly dangerous if I were to start working out a series of hypothetical situations and saying what the Government would do. I think that the matter would be covered. As the hon. Gentleman knows from his own connections, we have had close contact with the companies on the whole issue and have worked closely with them.
I turn now to the question of 1.p.g. and naphtha which, for some reason, has become a subject of debate. First, naphtha is not covered by the Bill. There is no reason why it should be. The number of users of naphtha is fairly limited, and the number of sources of supply also, unfortunately, is very limited. There is a world shortage of naphtha at present. It is possible to deal with naphtha by administrative process, and it is not, therefore, covered by the Bill.
I think that the confusion or argument on the question of 1.p.g. has arisen out of the fact that 1.p.g. is in gaseous rather than liquid form at the point of combustion. But this is irrelevant to the Bill because the same could be said of motor spirit. Liquid petroleum gas is a liquid fuel, by definition, and the Bill, therefore, covers it.

Question put and agreed to.

Clause, as amended, ordered to stand part of the Bill.

Clauses 2 and 3 ordered to stand part of the Bill.

Orders of the Day — Clause 4.—(APPLICATION OF PROVISIONS OF EMERGENCY LAWS (RE-ENACT- MENTS AND REPEALS) ACT 1964.)

Mr. Marsh: I beg to move Amendment No. 7, in page 3, line 31, at the end to add:
and in paragraph 2(3) of that Schedule the reference to that Act included a reference to this Act.
This is a drafting Amendment. Paragraph 2(3) of Schedule 1 to the Emergency Laws (Re-enactments and Repeals) Act, 1964, authorises the retention of documents taken under a magistrate's warrant for three months or, if proceedings are begun within that period for an offence under the Act to which they are relevant, until the end of the proceedings. All that the Amendment does is to adapt this provision so as to apply it to cases where proceedings are taken for offences under the Bill.

Amendment agreed to.

Clause, as amended, to stand part of the Bill.

Orders of the Day — Clause 5.—(OFFENCES AND PENALTIES.)

Mr. Marsh: I beg to move Amendment No. 8, in page 3, line 39, at the beginning to insert:
(except as mentioned in paragraph 2(4) of that Schedule as so applied)".
This also is a drafting Amendment. Paragraph 2(4) of Schedule 1 to the Emergency Laws (Re-enactments and Repeals) Act, 1964 makes it an offence to obstruct the exercise of a right of entry or search conferred by a magistrate's warrant under the paragraph and imposes a penalty of up to three months' imprisonment or a fine of up to £50, or both. The Amendment merely preserves that penalty, which is less than that laid down under Clause 5(4).

Amendment agreed to.

Mr. Emery: I beg to move Amendment No. 9A, in page 4, line 11, to leave out from "commit" to "an" in line 12.
This is a probing Amendment. I am not a lawyer, as is obvious from anything I say, but it seems to me that the words which I seek to delete by the Amendment are somewhat unusual. I have taken legal advice, and I am in-

formed that they are not the usual form of words in regard to this sort of offence.
The words seem to say that any person who makes a statement before an offence has been committed may himself be committing an offence. If that is right, it is a pretty terrifying piece of legislation. I might commit an offence by saying something before an offence has been committed quite other than in what one thinks of as the usual manner of conspiring with other persons to commit an offence. Those words,
conspires with any other person to commit
appear earlier in the subsection, and I understand that they are quite usual in reference to persons minded to conspire together to commit offences.
12 noon.
Suppose that somebody drives up to a petrol station and says, perhaps jokingly, "I want to put in a darned good store of petrol". Has he committed an offence by wishing to acquire a store of petrol? The words
does any act or makes any statement preparatory to the commission of, an offence
could be interpreted in such a way that it was an offence. I am very much against moving away from the established procedures which are understood by people, particularly when it comes to the commission of offences. It was because I did not fully understand the words and because there were matters which I was concerned about that I thought that it would be sensible to propose their deletion. I cannot understand what powers the words give the Minister which are not already given to him.

Mr. Marsh: The hon. Member for Honiton (Mr. Emery) has raised an important point and his Amendment is understandable. His interpretation of the provision is quite right. It includes as an offence not only the commission of the offence but actions preparatory to its commission. This is a serious proviso. There is a precedent for it, and that is the inclusion of provisions of this type in Regulation 30 of the Emergency Regulations, 1966. Such a provision is justifiable only in emergencies.
To give an example, it would be a serious offence to forge petrol coupons if there were rationing, but without this


provision it would not be an offence for a person to have in his possession large quantities of implements, plates and presumably other paraphernalia which would enable him to forge coupons. The Bill provides that it would be illegal not only to forge coupons but for any person or persons to engage in acts or discussions which it could be shown would lead to the commission of an offence.

Mr. Emery: What about the forgery of money? This sort of phrase is not used in that instance, and it is a much greater offence. It is not necessary to use such phraseology to protect the currency. I should have thought it was unnecessary to use it to protect petrol coupons.

Mr. Marsh: If the hon. Gentleman is in possession of plates for pound notes, the quicker he gets rid of them the better for his peace of mind. That would be highly illegal.
Regulations might be introduced to prevent the hoarding of petrol. If a person arrived at a garage with 30 one-gallon cons in the back of a small 800 c.c car, it would be reasonable to assume that he was engaged in preparations for hoarding petrol. All that the provision does is to provide the authorities with the task of having to prove that an offence has been committed. We have to be in the position of preventing people from committing offences as well as dealing with them when they are committed. For example, if there were mass forgery of petrol rationing coupons, the entire scheme could be disrupted.

Mr. Emery: I find the Minister's reply most unconvincing. I was worried before I moved the Amendment. I am even more worried now. The examples which he gave were completely beyond the understanding which I have of the need for these words. Like myself, the right hon. Gentleman is not a lawyer. Perhaps he finds as much difficulty in defending the words as many other people would. Although I am very unhappy about the situation, in order to assist the Government, as the Opposition are always willing to do in getting necessary legislation through the House—and I am sure that the right hon. Gentleman will recognise our efforts on this Bill—

I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause, as amended, ordered to stand part of the Bill.

Orders of the Day — Clause 6.—(FINANCIAL PROVISIONS.)

Question proposed, That the Clause stand part of the Bill.

Mr. Emery: Subsection (3) makes an exception of the Postmaster-General. I do not understand that. Why is it necessary to exclude the Post Office from bearing expenses?

Mr. Marsh: The Post Office is in a different position from, for example, the Ministry of Transport. It is not a Government Department in these circumstances.

Question put and agreed to.

Clause ordered to stand part of the Bill.

Orders of the Day — Clause 7.—(INTERPRETATION.)

Amendment made: No. 11, in page 4, line 41, after 'purposes' insert:
'"lubricating oil" includes lubricating grease'.—[Mr. Marsh.]

Clause, as amended, ordered to stand part of the Bill.

Orders of the Day — Clause 8.—(DURATION OF ACT.)

Mr. Ridley: I beg to move Amendment No. 12, in page 5, line 7, to leave out '30th June 1968' and insert '31st December 1967'.
The Bill claims in the Explanatory and Financial Memorandum to be temporary—"… to control temporarily the supply …". Not long ago the Minister said that the Bill was necessary to meet a short-term crisis, and that everything about the Bill was temporary and short-term. If this is so, I submit that one year is far too long a period for the Bill to have currency, and I move that the period be halved to six months and that the Bill should lapse entirely at the end of 1967.
If we cannot bring to an end petrol rationing, or whatever rationing there may be, within six months from now, we will be handling this crisis with great


incompetence. If there is a new development in the world situation, a new explosion in the Middle East, then that would be a different state of affairs calling for different legislation. From all that the Minister has said, it would be quite wrong to give power to do what is contained in the Bill for more than six months.
There is a stronger reason still for this. We listened with sympathy to the arguments put forward by the right hon. Gentleman for resisting the positive order procedure. He may well have had a case. If one accepts that argument, it means that there can be no debate, not only upon the wisdom and advisability of petrol rationing, but upon its form. Orders might be introduced under the negative procedure which might not be debated at all if the House was not sitting, or, if they were debated, could not be discussed for more than one and a half hours, and even then might not be reached.
As the Bill stands it could happen that we have petrol rationing for a whole year without this House having an hour or an hour and a half's debate. It is essential that the legality of the Bill be brought to an end by Christmas, so that we can have an opportunity, if rationing is to extend beyond Christmas, to debate the new Bill which the Government would be forced to bring in. It is not possible to move that the Order should have a currency of only six months and I have had to move in respect of the Bill.
The right hon. Gentleman has been very fair. He has admitted that these are most wide powers. This is a massive power to control anything to do with fuel and petrol for as long as he likes, for a year, without any chance for Parliament to debate the imposition of the Orders, about which, he frankly admitted, he knew nothing.
Rationing is intolerable in these times. It is something which the House and country should do everything to avoid. I regret that petrol should be contemplated for rationing. We already have a holiday travel allowance ration and office building rationing, and I will fight against the extension of rationing to any other commodities, including petrol, to the greatest extent that I can.
My heart sank a little while ago when I heard the right hon. Gentleman mention the word "coupons". I thought that it was a word that we had forgotten. The idea of those nasty bits of paper every time one buys a gallon fills me with horror. We should firmly set our minds against giving this Bill any length of life which can be avoided. It would be quite wrong to give the Minister more than six months for this Bill. If the worst comes to the worst, and he needs to continue rationing beyond the end of the year, let him come to the House with a new Bill and let the House have the opportunity to question the supplies and stocks and the form of rationing, and all the other points which will arise.
Otherwise there is no reason why there should be any Parliamentary challenge of any substance, or any chance to vote before this time next year, and that is thoroughly unsatisfactory. During the Second Reading of the Bill the right hon. Gentleman said that there were certain administrative difficulties about shortening the period. I am not necessarily saying that the period would have to be shortened if the Amendment is accepted. I am merely saying that if the Government need to continue petrol rationing they should come back to the House and seek a new Bill, and new authority. After the Minister's admission of the widespread powers and the large amount of discretion that he is taking, he owes it to the House to accept this Amendment.

12.15 p.m.

Mr. John Peyton: I wish briefly but warmly to support my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) in this exceedingly reasonable Amendment. No one can foresee for how long this Measure will be needed, and it is wholly wrong, faced with a temporary situation, for the Government to be given very full powers for a longer period than is absolutely necessary. I am quite certain that the Parliamentary Secretary would concede at once that the Opposition have not delayed this Bill at all—remarkable in the circumstances and in the present Parliamentary climate.
Had the boot been on the other foot, and the present Government had been in Opposition, suffering from the conduct of the Leader of the House, as we are


suffering, this Bill would have been delayed a very long time indeed. We accept that the national need must come first, and we will not make a party political issue out of this. The Parliamentary Secretary and the Minister would do well to think seriously of the point made by my hon. Friend.
To return to the Leader of the House, we were recently dealing with an Amendment, the subject of which was lubricating oils and lubricating grease. Long use of these two substances could be recommended to the Leader of the House, whose incursions here, in a reasonably democratic Assembly, are as brutal and as unwelcome as the incursions made into the centre of Rome by the Vandals and the Goths.

The Temporary Chairman (Mr. Gurden): That may well be so, but we must come to the terms of the Amendment.

Mr. Peyton: I bow to your Ruling, Sir, but I am sure that you will be the first to appreciate how these sentiments are wrung from one in the present climate of Parliament. I will not trespass upon your indulgence, because I confidently feel that you entirely share the views that I have lamely expressed.
I very much hope that the Parliamentary Secretary will join the Minister in saying that he believes that this Amendment should be accepted, and that it is wrong for the Government to divorce themselves from Parliament making a re-tern to the House unnecessary for so long a period upon such a subject.

Mr. Emery: No one who has not sat through this debate would believe that the proceedings since 10 o'clock had been conducted with the greatest degree of co-operation and good will between Opposition and Government. My hon. Friend the Member for Yeovil (Mr. Peyton) and myself have been in this House throughout the night on the last two nights, and have had two hours between finishing the prices and incomes debate and returning to this matter.
It is quite remarkable that we have been willing, after the complete disorganisation that the Leader of the House has brought to the business, to deal with this question in such a moderate manner. By withdrawing my

Amendment about the affirmative and negative procedure, although I was not entirely happy, but was willing to ensure that the Government get the Bill today, I feel that we have proved that we are trying to help. Surely there is every reason for the Government to try to meet at least just one of our points on this Bill, by slightly limiting the duration of these powers.
The Minister knows that if it should be necessary to continue these powers afterwards the House will give him the powers. I asked the Parliamentary Secretary a question about this on Second Reading and got a pretty shirty answer, so that it is even more surprising that we should be in such a reasonable spirit today. So I would urge the Government to make this very minor concession, this infinitesimally minor concession. We all know that this rationing will probably not have to come about. As we have withdrawn our Amendment about the affirmative Resolution, surely the Government will meet us on this matter.
As the Minister has just returned I would add, without going over the whole of my speech, that I was trying to stress that as we have been very co-operative with him, even when there may have been reason for extreme friction after all that has happened over the last few days, and have sought not to inject that spirit into these discussions, surely therefore he should instruct the Parliamentary Secretary, if the latter is to reply to the debate, to give way on this one point. We will give the Minister the powers which it is reasonable to want, but because of the sweeping nature of these powers let us, for goodness' sake, in a democratic assembly say we want these powers only for as short a time as possible. This is not asking very much, surely? It is no more than what the Minister himself said during earlier debates, and I would urge acceptance of this Amendment.

Sir K. Joseph: I would ask the Minister, in replying to the speeches of my hon. Friends, to try to go as far as he can in telling the country some of the facts about supply. Obviously, we must leave the discretion entirely to him, but we have now had Second Reading and


a large part of the Committee deliberations without any information from the Government at all about those sources of oil which are operating freely and those sources of oil which are blocked, but which the Government hope will be operating freely. I say again that we obviously do not want to embarrass the Government in relation to the supplying countries, but please can the Minister, in giving an answer on the Amendment by my hon. Friend, tell us as much as is safe about supplies from Nigeria, from Libya, from Kuwait, from Iran, from Iraq, from Venezuela, and from the United States, subject, of course, to the national interest?

The Parliamentary Secretary to the Ministry of Power (Mr. Reginald Freeson): May I first apologise for the state of my throat, which is the reason why I have participated so little in this debate.
Perhaps I will take the last point first, that from the right hon. Member for Leeds, North-East (Sir K. Joseph), and say that we cannot pursue the question of supply in the kind of detail he seems to want, chiefly on two grounds. First, because it would be difficult in these circumstances to discuss this matter at this time, and, secondly—linked very closely with this—since this is so essentially a matter arising from a political situation it is rather a matter for a foreign affairs debate than on the Bill before us. It is not because we do not wish to be helpful but because of the very nature of the situation which gives rise to the action which is before us.

Mr. Ogden: Would my hon. Friend comment perhaps that supply is not only a matter of sources of supply but also of transport, and the fact that the Suez Canal can be opened in six months does not mean that ships—tankers—will be able to go through in the six-months' period because of pre-charging arrangements and all sorts of changes?

Mr. Freeson: I am obliged to my hon. Friend. I was coming to that point before moving on to the other points which hon. Members opposite have raised.
Certainly I repeat the point made by my right hon. Friend that it is essen-

tially a question of tankerage rather than the supply of oil itself.
If I may mention the point with regard to the Suez Canal, without going into the realm I have said we must avoid today, it could be opened much earlier than within six months' time. We will leave that for another occasion, perhaps.
On the general point raised by the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) and his hon. Friends, it is in no spirit of disagreement as to the motives which they expressed, that we should want to have rationing, if it should ever have to come about, any longer than necessary. It is in no sense in disagreement on that point that we cannot accept what he is proposing. If this provision is to operate for 12 months, it is not likely that, should the need arise, rationing could possibly come into operation for quite some time. There are administrative difficulties which have been referred to earlier. Although in practice one may not want to extend rationing—if it were ever to be introduced—beyond the end of the year, one might have to consider the position after that initial period. It is for this reason that, in our view, we must adhere to the date 30th June as being in practice the shortest possible period for which we must have the powers. I hope that hon. Members opposite will understand that it is not because we want to take a longer period than is absolutely necessary that we must persist in the date as set out in the Bill, and I ask the House not to accept the substitute date of 31st December, 1967.

Mr. Ridley: I must say that that is not an answer which satisfies me. My point was that at least the House should have a debate on the question if rationing has to go beyond the end of the year. We cannot be expected to have any confidence that the Leader of the House will find time, or, if it is found, that it will not be 7 o'clock in the morning or some such insufferable hour. Nobody can have confidence that we will have a debate unless we force the Government to come back to the House in the way I was describing.
I do not want to stop the Bill from going through, but I think the temper-


and patience of my hon. Friends has been tried very sorely this morning, and if the hon. Gentleman cannot put up a better defence than that it would be far better to agree to the proposal I put forward. I am not at all satisfied with what he said.

Mr. Freeson: If that is solely the point at issue—if it is really desired that there should be a debate at a later point in time—I would only say that it is possible to arrange these matters through the usual channels.

Amendment negatived.

Clause ordered to stand part of the Bill.

Clause 9 ordered to stand part of the Bill.

Orders of the Day — New Clause.—(ISLE OF MAN AND CHANNEL ISLANDS.)

Her Majesty may by Order in Council direct that this Act shall extend to the Isle of Man or any of the Channel Islands, with such exceptions, adaptations and modifications as may be specified in the Order.

(2) Any Order in Council under this section may be varied or revoked by a subsequent Order of Her Majesty in Council.—[Mr. Marsh.]

Brought up, and read the First time.

Mr. Marsh: I beg to move, That the Clause be read a Second time.
This is not a controversial new Clause, I hope. The Long Title of the Bill relates solely to the supply, acquisition and consumption of liquid fuel in the United Kingdom. Liquid fuel for use in the Isle of Man and the Channel Islands reaches them through the United Kingdom, and, after consultation with the authorities of the islands, it seems preferable that the Bill should be extensible to the islands by Order in Council, and that is really all the new Clause provides.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

Orders of the Day — Title

Amendments made: No. 13, in line 2, after 'fuel', insert 'and of lubricating of and grease';No. 14, in line 2, leave out 'in the United Kingdom'.—[Mr. Marsh.]

Bill reported with Amendments [Title amended]; as amended, considered; read the Third time and passed.

SUB-POSTMASTERS

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Harold Walker.]

12.30 p.m.

Mr. Ian Gilmour: I am grateful for the opportunity to discuss the difficulties facing sub-postmasters. I am only sorry that the right hon. Member for Devon, North (Mr. Thorpe) is not here this morning, since I understand from the leaks which appeared in the Press last year that he served as a sub-postmaster for a time and is well aware of the difficulties which they face.
Usually, when we discuss Post Office affairs, the indispensable sub-postmasters and mistresses who do so much of the work do not receive a great deal of attention. That is quite wrong, because the 23,000 sub-postmasters handle more than 60 per cent. of all Post Office counter business and, wherever possible the Post Office appears to favour sub-postmasters kindling its business instead of Crown offices. I think that that is on the advice of McKinseys. In fact, the Assistant Controller of the South-Western Region told the Ilminster Urban District Council recently that a proposal to down-grade the Ilminster Crown Office would save £3,062 a year in staff costs and £700 a year in overheads. Sub-post offices, therefore, save money, but the savings should not be at the expense of the sub-postmasters, and as they are at present.
I do not believe that sub-postmasters are getting a proper rate for the job which they do. Although the gross average salary is just over £1,000, this is because there are a few offices with a high turnover carrying a high salary which makes the general position seem much better than it is. The mean of the salaries paid is approximately £750. That is a gross salary and, after deducting expenses for such services as lighting, heating, and so on, the man with a gross salary of £750 has a net salary of about £520 a year, or £10 a week. That, of course, is before tax. According to the National Federation of Sub-Postmasters, its 15,000 members have a net income of less than £14 a week.
I expect that the Assistant Postmaster-General will say that it is wrong to


differentiate between gross salary and net salary because sub-postmasters have other sources of income and will incur expenses in any event whether or not they have the income from a sub-post office. In some cases, that is true, but more than 5,000 sub-postmasters have no private business other than the Post Office, and the Post Office pays the employer's share of the National Insurance contribution for 17,000 sub-postmasters, which proves that the Post Office is their main livelihood.
The existing scale payments system was devised by the Hobhouse Committee as long ago as 1908. At that time, the majority of sub-postmasters ran their businesses as appendages to their other business activities. The Committee started off with that assumption, and that seems still to dominate Post Office thinking, although conditions have altered radically. Today, in the majority of cases, the sub-post office is no longer an appendage but forms the main part of the sub-postmaster's business undertaking. They find that their Post Office activities have increased while their retail trade has declined for the well-known reasons of the growing number of supermarkets, the increase in mail order business and the wider ownership of cars resulting in people doing less village shopping and going instead into the towns. I hope that the Assistant Postmaster-General will not attempt to argue that the sub-postmaster's salary can be treated in any other way than as his main source of income.
What does the £10 a week sub-postmaster do for the Post Office? He handles about £250,000 worth of business a year for it. That is about £5,000 a week, and it is a lot of money and a great deal of responsibility in return for £10 a week. The sub-postmaster is responsible for all losses incurred by his assistants, and they can be considerable. Only last week I heard of a case where an assistant paid out too many stamps, costing the sub-postmaster £12 which he had to pay. Responsible assistants are very difficult to recruit at the rates of pay which the sub-postmaster can afford. It is well known that there have been substantial losses, and they are very frequent.
Probably one of the greatest worries for the sub-postmaster is the risk of physical injury by criminals attracted by

the large sums of money known to be held at sub-post offices. Many offices are in relatively isolated places and, as such, are extremely vulnerable. Last year, there were 87 incidents involving violence or the threat of violence, including the murder of a sub-post office assistant at Leeds and a number of cases of serious injury. In some cases, sub-postmasters or mistresses have been attacked in their bedrooms by intruders seeking the keys to Post Office safes. They have a nagging fear of that kind of thing which they live with all the time.
Following a recent survey which showed that about 40 per cent. of all such incidents in sub-post offices occurred over and round the counter, Post Office engineers designed an anti-bandit screen suitable for sub-post offices. They cost about £100 each, and the Post Office wants the sub-postmasters to pay £60 towards the cost. This is an inexcusable piece of meanness on the part of the Postmaster-General. A Government who give away vast sums of money to industry are not prepared to make a once and-for-all payment to protect sub-postmasters and their assistants from criminals. I urge the Postmaster-General to waive the £60 payment, which is the only decent thing for him to do, and get on with the job of installing sub-post office counter screens as quickly as possible.
Most people are aware of the long hours that a sub-postmaster works. For many it is a nine to six day for six days a week. About 8,000 sub-post offices are concerned with the delivery of mail and telegrams which involve anything from two to four hours' work in the early morning, between 4.30 a.m. and 9 a.m. The sub-postmaster can, of course, have time off, but even if he is sick or on holiday he remains responsible for the good conduct of the office and for the security of the cash and stock in that office. He has to provide his own substitutes and because often substitutes of sufficient calibre cannot be found thousands of sub-postmasters are quite unable to go away on holiday. They receive a substitution allowance of £1 7s. a day for two weeks and three days each year if they actually take a holiday, but there is no substitution allowance during sickness. They get nothing if they are ill and have to employ substitutes.
A few years ago the National Federation of Sub-Postmasters entered into an agreement with the Unicorn Trust that sub-postmasters should sell units of that trust to the public as part of their ancillary business. More recently they entered into negotiations to sell single payment assurance bonds in conjunction with Hambro's Bank. The Post Office refused to allow sub-postmasters to do either of these things because such activities would have competed with investment facilities sold on behalf of the Government.
The Assistant Postmaster-General should recognise that by restrictions of this sort the Post Office limits the opportunities of sub-postmasters to supplement their incomes. Sub-postmasters feel very strongly that the Post Office is enforcing a restrictive practice upon them, yet the Post Office is not prepared to take account of the enforcement of that restrictive practice in their payment to sub-postmasters. I ask the Postmaster-General to look at this matter again and to reverse his decision, not only because such a reversal would help sub-postmasters, but because it would also help the public. The enforcement of this restrictive practice is undesirable in itself.
I am aware that the sub-postmasters have recently had a salary rise—a very small one. A man earning about £750 a year—£10 a week net—was given £16 a year, or 6s. a week, more, which was not exactly a bonanza. I hope that the Postmaster-General will give most generous consideration to any further pay claim made by the sub-postmasters, particularly as I think it could be claimed that they come within the criteria of lowly-paid workers as laid down in the White Paper. Such a criterion is so cloudy and uninelligible that it is difficult to be quite certain, but I think they do come in that category.
I do not consider that a sub-postmaster's other income should be considered as a reason for not giving him a reasonable wage. I do not think that is a cogent or defensible argument. At present the Post Office is doing more than 60 per cent. of its business on the cheap. That is wrong for an organisation such as the Post Office. The sub-postmasters and sub-postmistresses give excellent service to the public and deserve a far better deal than they are given at present.

12.45 p.m.

The Assistant Postmaster-General (Mr. Joseph Slater): I am grateful to the hon. Member for Norfolk, Central (Mr. Ian Gilmour) for introducing this Adjournment debate. His case is based on three points: the proper rate for the job; the risk of injuries through violence; counter services and the long hours that sub-postmasters work.
The sub-postmasters' organisation and sub-postmasters play a very important part in our administration. As the hon. Member said, there are 23,000 sub-post offices accommodated mainly in shops, where about half the counter business of the Post Office is transacted. They enable service to be given in remoter areas as well as in the towns, and the sub-post office has gained for itself a special place both in town and village life.
The amount of business handled in these offices varies enormously. At the smallest there may be only a few transactions a day. But these transactions are of course of great significance to the local residents. A few of the largest offices handle as much business as Post Office counters manned by Post Office staff. We do not deny this. I hope that we shall see their valuable service to the community continuing for very many years to come.
When considering the general conditions under which sub-postmasters are employed, it is important to remember that they are not civil servants or employees in the usual sense. They provide certain services on an agency basis, and are paid according to the amount they do. Because, as I have said, very little work is in fact handled at some offices there is a guaranteed minimum payment however small the Post Office business actually done in the office.
Moreover, the great majority of offices are combined with a private business and do not provide the sole means of livelihood. While many sub-postmasters—and that includes sub-postmistresses too—are well-known friends to the people who do Post Office business with them, the sub-postmaster does not have to serve personally in his office. He is simply responsible for seeing that the work gets done.
It follows that the conditions of service of full-time salaried employees are not


applicable to the sub-postmaster. But we try to behave as enlightened employers even if we are not really employers in quite the usual sense of the word. For example, if they do a substantial amount of work themselves, they are paid gratuities according to their length of service on retirement. On the whole, I believe this special relationship has worked well, and has been to the mutual benefit of both parties.
I turn now to the question of pay. I have already said that sub-postmasters are paid according to the volume of Post Office business done in their offices. The broad principles involved can be traced back to the work of the Hobhouse Committee which reported in 1908, and it must be seen as a tribute to the work which was done then, that the system has lasted so long. Many changes of detail have of course been incorporated since to take account of changing conditions and new types of work, and we are always ready to consider further improvements. Hon. Members may be interested to know that the system involves evaluating the work of an office in terms of units which take account of the time it takes to complete the different types of transaction. The units are read off against a monetary scale which covers reimbursement to the sub-postmaster of expenses incurred in the performance of Post Office work and a profit element for the sub-postmaster. Both these elements are reviewed from time to time, and the scale revised accordingly.
We have just reached agreement with the National Federation of Sub-Postmasters for a revision of the scale to take account of the movement of expenses during 1965 and 1966, covering such items as rent, rates and the wages of assistants. My right hon. Friend has also recently made special arrangements for a new element in expenses, the reimbursement to sub-postmasters of Selective Employment Tax paid on assistants employed on Post Office work. The last improvement in the whole scale, that is, including the money paid to sub-postmasters over and above expenses, took effect from 1st January, 1966, also by negotiation with the Federation and in accordance with the general agreement we have with them for the treatment of sub-postmasters' pay.
I have given the House only the broadest outline of a system which is a fairly detailed one to cater for the variety of circumstances which can affect the work of sub-postmasters. In such a system matters are constantly arising for discussion between my Department and the Federation. My Department spends about £25 million a year in payments to sub-postmasters, and I am sure we must all agree, that, when we consider the part they play, this is money well earned and well spent.
We have in the last 12 months been introducing revised hours of business at Post Offices throughout the country. The great majority of post offices, and virtually all sub-post offices, now open at 9 o'clock. They close at 5.30 p.m. from Monday to Friday, and at 4.30 p.m. or earlier on Saturdays. This is because we found that, in general, business was relatively light outside these times. As far as Crown offices are concerned, we also had to consider our serious recruitment problems. We recognised that many sub-postmasters had similar problems in obtaining assistants, and we asked head postmasters to revise sub-office hours at the same time as they revised those at Crown offices.
In general, sub-post offices have shorter opening hours than Crown offices. Most of them have an early closing day; many of them close for an hour at lunch-time; and some close earlier than 4.30 p.m. on Saturdays—provided that business has been negligible and that they also close their private business. When a sub-postmaster applies to have his hours of opening changed, we aim to give the most sympathetic consideration to his case—but it goes without saying that the needs of our customers have to be taken fully into account.
I should like to say a word on sub-postmasters' holidays. We have been asked by their Federation to allow town sub-post offices to close for one week each year so that sub-postmasters can arrange a holiday more easily.
In some few places where virtually the whole town goes on holiday at the same time, sub-post offices have for many years closed for one week. But in the great majority of places we could not allow sub-post offices to close even on a staggered basis without seriously inconveniencing our customers.
We know that in some cases sub-postmasters find it difficult to arrange for substitution during holiday periods. While this difficulty often involves their private business as much as their postal work, we none the less sympathise and have done what we can to help, including giving some financial assistance.
But the fact remains that the sub-postmaster agrees to provide Post Office counter services throughout the year. He does not have to give personal service, and in most cases those sub-postmasters who want a holiday are able to make suitable arrangements for the running of their offices during their absence. Head postmasters are always willing to help where they can, and wherever possible they have—with the help of local subpostmasters—compiled lists of people who are known to be willing to substitute sub-postmasters away on holiday.
We can well understand the wishes of our sub-postmasters to be able to lock up and get away quickly in the evening, and we aim to make the final collection from our sub-offices as soon as possible after the counters are closed for business. The earlier closing of counters at the end of the day has posed special problems, of course, and the trips made b} our vans to make the evening collections have needed a great deal of reorganising to take account of these earlier closing hours. In some places the rescheduling required has taken a little longer than some of our sub-postmasters might have hoped, but nevertheless their attendances for mail work long after counters have closed are now being steadily eliminated.
The serious increase in crime during the post-war years has created special problems for sub-postmasters, both as shopkeepers and in the discharge of their Post Office agency business. As shopkeepers, they are faced with the fact that shopbreaking offences have more than doubled in the last decade. This has called for prompt preventative measures, and it is perhaps significant that the rate of increase in sub-post office breakings during this period has been considerably less. This gives us no cause for complacency. Nevertheless it demonstrates that sub-postmasters, with Post Office help, have tackled their crime prevention problems effectively and kept

them within reasonable bounds during a most difficult period.
Under the scale payment system, sub-postmasters are responsible for providing the accommodation and equipment needed to safeguard Post Office cash and stock entrusted to them. However, the Post Office bears the full loss of any cash and stock stolen, save in isolated instances where the sub-postmaster may be called upon for a small contribution towards the loss if he has failed to take reasonable precautions. So we take a close interest in what he does about security of his premises. We do not just tell him that crime prevention measures are up to him and leave it at that. We give him a great deal of expert advice which is designed to encourage high standards of security.
We follow this up with a good deal of practical help, particularly in crime-prone areas where the expense of providing free devices to protect property can be justified as insurance costs against the losses we bear. But we do not rely on insurance costing when it comes to protecting sub-post office people from crimes of violence against the person.
The upsurge of robbery accompanied by personal violence against people is one of the most serious crime problems facing the country today. The impact on sub-postmasters or sub-postmistresses and their staff is brought home to me all too often when my right hon. Friend and I meet many of them to present awards for acts of bravery when they have been attacked by thieves trying to steal Post Office cash. It is always a pleasure to meet these courageous people. But it is also alarming to hear at first hand the accounts of the frightening experiences, sometimes the suffering, that they have been through. Prevention of robbery is not an easy matter. When we have listened to many of these people, my right hon. Friend and I have recognised the great risk that they take.
In the last 12 months, our security advisers have held regular consultations with representatives of the sub-postmasters on ways and means of improving existing safeguards against robbery, development and trial of new devices, including a specially designed anti-bandit screen for sub-post office counters. We


are discussing with the Federation what part of the cost will be met by the Post Office. I can pay no better tribute to the excellent work of this committee than to quote the General Secretary of the National Federation of Sub-Postmasters. In an article published a few days ago in Security Gazette he wrote:
This body has done a great deal to improve protection and reduce the incidence of robberies. Staff consultations are normally painfully slow, but the Post Office has responded to this particular problem with unprecedented speed and purpose.
He went on to mention certain encouraging signs that the increase in the scope of advice and practical help resulting from these joint consultations, and by no means least the sharpened security consciousness, the bravery and resourcefulness of sub-postmasters and their assistants, all these have contributed

to a 24 per cent. reduction in the incidence of robberies with violence at scale payment post offices during the 12 months ended March, 1967.
I should like to take this opportunity to add to this tribute that we shall not fall into the trap of relaxing our efforts. On the contrary, we intend to continue to do all that we reasonably can to prevent sub-postmasters and their staff from getting hurt.
I ought perhaps to end as I began, by emphasising the most important rôle that sub-postmasters play in giving friendly service to the community. Whatever shape the Post Office takes in the foreseeable future, their vital function will remain, as I see it, for this service.

The debate having been concluded, Mr. DEPUTY SPEAKER suspended the Sitting until half-past Two o'clock, pursuant to Order.

Sitting resumed at 2.30 p.m.

PETITION

Vietnam

Mrs. Lena Jeger: With your permission, Mr. Speaker, and that of the House, I beg leave to present a petition which represents the views of more than 900 constituents, students of University College, London, who are deeply concerned about the continuation of the bombing of North Vietnam and of the failure of Her Majesty's Government to dissociate themselves from this policy.
I beg you to instruct the Clerk of the House to read the petition to the House.
THE CLERK OF THE HOUSE read the Petition, which was as follows:
The humble Petition of students and academic staff of University College London sheweth; That the war in Vietnam is politically and morally untenable and represents a very grave threat to the peace of Asia and the whole world;
Wherefore your Petitioners pray that your honourable House shall require Her Majesty's Government to support the peace programme of U Thant, the Secretary-General of the United Nations, which is

(1) the cessation of the bombing of North Vietnam;
(2) the scaling down of all military activities by all sides in South Vietnam;
(3) a willingness to enter into discussions with those who are actually fighting.
And your Petitioners, as in duty bound, will ever pray.

To lie upon the Table.

Oral Answers to Questions — RAILWAYS

Surplus Land

Mr. G. Campbell: asked the Minister of Transport how many projects for development on surplus railway land were agreed in each of the years 1964, 1965 and 1966; and what was their capital value in each year.

Mr. Geoffrey Wilson: asked the Minister of Transport how many acres o land have been sold or leased for development by the British Railways

Estate Department in each of the years 1964, 1965 and 1966.

The Joint Parliamentary Secretary to the Ministry of Transport (Mr. John Morris): The number of development projects agreed by the British Railways Board in each of the years 1964, 1965 and 1966, in which the development value of surplus railway land was realised either by sale or by long lease, was 90, 56 and 50. The capital value of the land involved was about £2·7 million, £2·6 million and about £2·8 million.
The Board do not keep aggregate records by acreage of land leased or sold. They have, however, estimated that the total acreage sold for all purposes in each of these years was about 2,000; 3,000 and 5,500 acres.

Mr. Campbell: Cannot such development contribute to reducing British Railways' deficits? Is it the Government's policy to encourage the development or sale of such land?

Mr. Morris: Certainly, this kind of development can help the finances of British Railways, but there are, unfortunately, limitations on what can be done under the terms of the Transport Act, 1962. We are looking into this in the course of our plans for the next legislation. In addition to this, there has been the outright sale of land in the last two years—in 1965, £12·7 million and in 1966, £24·3 million.

Mr. G. Wilson: Is the Joint Parliamentary Secretary satisfied that everything possible is being done to use the surplus railway land? There seems to be a lot not being utilised at present.

Mr. Morris: This is obviously a matter for management, but I am satisfied that an enormous effort is being made to utilise surplus land within the limitations of the present legislation.

Mr. Ronald Atkins: Is my hon. Friend satisfied that enough is being done to develop railway termini sites, and in particular at Euston?

Mr. Morris: If my hon. Friend will put down a specific Question on that point, I will deal with it. Generally, there are limitations on building in London and there are the restrictions on office building, of which my hon. Friend


will be aware. The Railways Board obviously has to operate within the terms of the general legislation.

Mr. G. Campbell: asked the Minister of Transport how many building development consortia are engaged in negotiations with British Railways with a view to developing surplus railway land.

Mr. John Morris: Five development consortia are associated with the British Railways Board with a view to developing railway sites.

Mr. Campbell: As much of the possible development is now held up by restrictions to which the Minister has just referred, what new initiative are the Government prepared to take in order to help British Railways and the community to realise the potential value of so much surplus property?

Mr. Morris: I have already told the House in my last Answer that a great effort is being made to utilise this kind of land to the full, but the Railways Board has to operate within the law of the land. One of the restrictions on this kind of development is the limitations imposed by the Transport Act, 1962. This we shall certainly consider in order to remove this kind of hindrance from the Railways Board in the legislation which will be presented by my right hon. Friend.

Mr. Webster: How often is there a joint venture between the Railways Board and the developer?

Mr. Morris: The five development consortia I have mentioned are enterprises carried on by the Railways Board with outside interests of the kind referred to by the hon. Member.

Sir H. Lucas-Tooth: Will the Joint Parliamentary Secretary look into the present method of dealing with surplus railway housing estates? A number of these estates consist of old houses that ought to be redeveloped, and there is a great hold-up in this connection. The tenants do not know what is going to happen, and there is delay in improving houses.

Mr. Morris: This is essentially a matter for management, and I think I dealt fully with this issue in the Adjournment debate that was initiated by the hon. Member for Harwich (Mr. Ridsdale).

Mr. Monro: asked the Minister of Transport what estimate has been made by British Railways of the surplus land which will be available for sale or development when the track mileage is reduced to 11,000 miles.

Mr. Morris: Any such estimate would be premature. As regards passenger services, the network for development published last March is a minimum; the eventual route mileage will depend upon my right hon. Friend's decision on each closure proposal put to her. Also, when any line is closed, the Board are asked to keep the land if there is a likelihood of a future need for a rail service.

Mr. Monro: Will not the hon. Gentleman do some forward planning so that this valuable land can be disposed of as soon as possible?

Mr. Morris: I can assure the hon. Member that this is done. The sales of land which have taken place in the last few years show it: 1964, £4·5 million; 1965, £12·7 million; 1966, £24·3 million. As the hon. Member is aware, if there is the likelihood of a future need for the land we take the advice of the Economic Planning Council and take a decision in the light of all the facts. There are difficulties sometimes about the selling of disused railway lines.

Mr. Peter Walker: Would the Minister agree that the 11,000 miles has already become meaningless in that in her circular to the local authorities the right hon. Lady stated that the P.T.A.s will have power to close some of the railway lines included in the 11,000 miles?

Mr. Morris: I can assure the hon. Member that the 11,000 miles figure is not meaningless. The basic idea of the 11,000 miles is to ensure that there is certainty about the passenger services of the country. This is what the Minister is seeking to achieve.

Mr. J. T. Price: Is my hon. Friend aware that I strongly object to the denationalisation of land now owned by British Railways? I am all in favour, as the Minister understands, of land being used to the best possible social purposes. The tremendous exploitation of land values and racketeering in land which has gone on does not tempt me to be too enthusiastic about denationalisation of the


only part of our British soil which has over come under public ownership.

Mr. Morris: I am sure that my hon. Friend is aware that the Minister has no such intention. As he knows, the first offer of this land is made to the local authorities. As an indication, £12 million worth has been made available within London to the local authorities. In that case, I do not think there is a great deal of difference between my hon. Friend and the Minister.

Closure Proposals

Mr. Ronald Atkins: asked the Minister of Transport if she will give a general direction to British Railways that, once she has rejected a rail closure proposal, no further application for closure shall be made for at least 10 years.

Mr. John Morris: No, Sir. Changes in the pattern of social and economic development make it impossible to prejudge the circumstances that may affect tae future life of a line or service over such a long period.

Mr. Atkins: Is my hon. Friend aware that when British Rail management proposes closure it does nothing to make the line more attractive but, rather, it stems to run it down, with the consequence that, if it is able to come back frequently over a certain period, having left the line much as it was or having run it down, potential custom is deterred? Further, is he aware—

Mr. Speaker: Order. There are many Questions on the Order Paper. I call the Minister to reply.

Mr. Morris: When my right hon. Friend makes a decision, she does on occasion seek to add to the decision by saying in what circumstances she would be prepared to look at it again. My hon. Friend must be aware that sometimes conditions change and, while it is important to infuse as much certainty as possible—this is my right hon. Friend's intention in announcing the 11,000 miles basic railway network map—one cannot prejudge matters over such a long period as he has in mind.

Staff (Employment)

Mr. Edward M. Taylor: asked the Minister of Transport (1) what estimate has been made by British Rail-

ways of the numbers of footplate and other staff who are retained in employment as a result of agreements on increased productivity and more efficient operation but for which no necessary work is available;

(2) how many firemen employed by British Railways have been made redundant since 1965 as a result of the introduction of single manning of electric and diesel trains; and in what types of work these men have been redeployed.

Mr. Webster: asked the Minister of Transport how many drivers, firemen and guards British Railways have estimated can be made redundant now without loss in efficiency or safety; and what estimate they have made of the financial saving to be obtained.

Mr. John Morris: The Railways Board estimates that about 1,600 firemen surplus to requirements as a result of the single manning agreement of October. 1965, under which they are protected against redundancy, continue to be employed on footplate duties at a cost of approximately I million a year. Overall, of course, the agreement will in due course produce considerable savings for the Board. No drivers or guards, and only a very small number of other railway staff, are retained in employment though surplus to requirements.

Mr. Taylor: Does the hon. Gentleman agree that that reply does not entirely tie up with many of the reports we have seen, particularly the report of one depot manager that one-third of his staff was redundant for all practical purposes? Does the Minister also agree that it is very bad for the morale of British Rail if it has a pool of unused labour? Can he see any way that this problem might be tackled in the future?

Mr. Morris: I think that the hon. Gentleman is referring to a report in a particular newspaper. I cannot accept its implications. The numbers are overstated, and they will decline rather than grow. Since 1965 the number of footplate men has dropped from 49,000 to 41,000. The railway unions should be commended for the great reduction that has taken place in the number of railwaymen over the past four years. The present surplus is only 4 per cent. of


the total footplate staff, and they are being utilised.

Mr. Webster: What would have been the cost of compensation for termination of employment in this case?

Mr. Morris: Perhaps the hon. Gentleman will put down a specific Question on that. The agreement is very valuable for the industry and will begin to pay its way very shortly. Over a very few years it will have more than paid its way for the full period.

Mr. Mapp: Is my hon. Friend aware that in the last accountable year there was a 7 per cent. reduction in the number of railway posts, when there was practically no change in gross railway receipts? Should there not be complete approval of the co-operation between the British Railways Board and the railway unions, which we on this side of the House were glad to see and are glad to see continued?

Mr. Morris: As I said earlier, the railway unions and management are to be commended for the great reduction of 160,000 men in the industry that has taken place over four years. It is exceedingly difficult in any industry where there is contraction for this kind of arrangement to be so successful.

Property Sales and Lettings

Mr. Webster: asked the Minister of Transport if she will give an estimate of the income that British Railways will receive from sales of property and lettings for each of the next five years.

Mr. John Morris: The British Railways Board estimates that capital realised from the sales of surplus property in each of the years 1967 and 1968 will be about £20 million; and the estimated net revenue from lettings about £8 million and £7·6 million. No estimates can be given for later years.

Mr. Webster: What is the loss of revenue or income resulting from the Control of Office and Industrial Development Act, 1965?

Mr. Morris: I cannot answer that question without notice. In London there has been a release to the G.L.C. of about

£12 million-worth of property over the past few years.

Mr. William Edwards: Does the estimate of the money to be released from sale of property refer only to property which is now free, or to railway lines which it has been said will possibly be closed?

Mr. Morris: The figures I have given refer to 1967 and 1968 and to land which will actually be surplus in those years.

Mr. Ridsdale: Will the Minister reconsider her decision to bar a public inquiry into the sale of houses and railway property, because many of the sales have been in the interests neither of railwaymen nor of the finances of British Rail?

Mr. Morris: As I have explained to the hon. Gentleman at some length, this is entirely a matter for management. He has grossly overstated the case in the allegations he has made in the House about Rachmanism.

Freightliner Trains

Mr. Mapp: asked the Minister of Transport what has been the build-up of freightliner traffic since the introduction of open terminals.

Mr. John Morris: In February this year, about 1,300 freightliner containers were being carried each week. During the week preceding the recent rail strike, nearly 1,900 containers were carried.

Mr. Mapp: May I ask my right hon. Friend, through my hon. Friend, whether she is aware of the deep satisfaction on, I think, both sides of the House at this startling improvement? In her discussions with the Railways Board and the railway unions, will she point out the need for access to the terminal to be available over the maximum number of hours during the day, even up to 16 hours, because this is an area of great potential development in relation to terminals?

Mr. Morris: I thank my hon. Friend for his kind remarks. The hours issue is essentially a matter for management, but I know that the British Railways Board is making every endeavour to maximise the use of this very important means of carrying freight.

Mr. Peter Walker: As these terminals will benefit the more the faster containerisation takes place, will the Government reconsider their decision not to provide investment grants for containers used in internal depots?

Mr. Morris: Investment grants are not a matter for my right hon. Friend. If the hon. Gentleman puts the Question down to the appropriate Minister I am sure that he will get an answer.

Mr. Roy Hughes: asked the Minister of Transport if she will publish a list of the container berth schemes she has approved; what is their cost; and where they will be sited.

The Joint Parliamentary Secretary to the Ministry, of Transport (Mr. Stephen Swingler): My right hon. Friend has authorised the provision of permanent deep-sea container berths at Tilbury, Liverpool, Greenock, and Southampton al an average cost of £2½ million per berth. She has also authorised provision of temporary facilities by conversion at Liverpool at a cost of £1 million. Facilities at a number of ports used primarily for short-sea traffic have not required authorisation, but at Harwich they form part of an authorised project costing £2½ million overall.

Mr. Hughes: I thank my hon. Friend for that reply. Will he take into consideration the excellent potentialities which exist for this form of development at Newport Docks?

Mr. Swingler: Yes, Sir. This matter is being discussed at the moment between my Department and the Docks Board, where a £2½ million modernisation scheme is going on. It may turn out that a container berth will be provided there if the traffic justifies it.

Mr. Roy Hughes: asked the Minister of Transport what steps she is taking to increase productivity in the new freightliner terminals.

Mr. John Morris: Productivity in freightliner terminals is primarily a matter for the Railways Board, who are currently introducing new types of cranes and containers where these will increase efficiency.

Mr. Hughes: While thanking my hon. Friend for that reply, and while appreci-

ating the need for increased productivity, may I ask whether he will ensure nevertheless that the future interests of the workpeople employed in these terminals are, by and large, his first consideration?

Mr. Morris: Certainly this is a very important consideration, and I am aware of my hon. Friend's interest in productivity. I was glad to see that he was present at the opening of the latest freightliner terminal at Cardiff the other day.

New Holland—Cleethorpes (Passenger Services)

Mr. McNamara: asked the Minister of Transport if she will defer any decision on the proposed withdrawal of passenger services between New Holland and Cleethorpes until after the report of the Humberside Feasibility Unit has been published.

Mr. John Morris: My right hon. Friend is at present in consultation with the Economic Planning Council for Yorkshire and Humberside about the regional planning implications of this proposal and she would certainly not give her consent until she had obtained their advice.

Mr. McNamara: Is my hon. Friend aware that there is considerable feeling on Humberside that, if this rail link is closed, it will be followed by the closure of the ferry before a bridge can be built and that this could have serious economic consequences for the development of Humberside as a whole?

Mr. Morris: Before reaching any decision, the full views of the Economic Planning Council will be before my right hon. Friend.

Mr. Ronald Atkins: Is the Minister adequately informed about the long-term effects of rail closures on planning?

Mr. Morris: Yes, Sir. My right hon. Friend has the advantage of the advice of the Economic Planning Councils at various stages of any proposals for rail closures. She also enters into full consultations with all other Government Departments directly involved.

Mr. Webster: Will that advice be published?

Mr. Morris: The advice is, of course, confidential.

Oral Answers to Questions — TRANSPORT

Transport Holding Company

Mr. Kenneth Lewis: asked the Minister of Transport why she authorised an increase in capital spending of £6 million by the Transport Holding Company in 1966; and why she has reduced the amount of the revenue surplus payable to the Exchequer by nearly £2 million.

The Minister of Transport (Mrs. Barbara Castle): I was satisfied with the Transport Holding Company's commercial judgment that the level of capital spending proposed for 1966 was justified by the future prospects of the business. The revenue surplus in 1966 was affected by general economic circumstances, and I considered it reasonable that this should be reflected by a reduced payment to the Exchequer and by reduced retentions by the Holding Company group.

Mr. Lewis: Does the right hon. Lady accept that if she encourages the commercial judgment of the Transport Holding Company into operating with free enterprise, this will increase the profitability of the Holding Company and, therefore, increase her revenue and reduce the Ministry's commitments?

Mrs. Castle: I am frequently in touch with the Transport Holding Company about its proposals. On the whole, I think its commercial judgment is to be relied upon.

Mr. George H. Perry: Does my right hon. Friend not agree that it is a good thing to expand the public ownership of the road haulage industry in order to bring about a more fully integrated system of public transport?

Mrs. Castle: Yes, I do. This is why I shall give the same powers of voluntary acquisition to the National Freight Organisation as are at present enjoyed by the Transport Holding Company.

Mr. Leslie Hackfield: asked the Minister of Transport whether she will give a general directive to the Transport Holding Company, not to allow their subsidiary companies to conduct anti-nationalisation campaigns against her Department's proposals for conurbation transport authorities.

Mrs. Castle: The Transport Holding Company have assured me that no bus company in which they hold a controlling interest is in any way engaged in such a campaign.

Mr. Huckfield: Will my right hon. Friend take any powers to dissuade the "friendly Midland Red", which is fast becoming one of the sickest jokes in the West Midlands, from continuing the campaign against her nationalisation proposals as envisaged in the passenger transport authorities?

Mrs. Castle: I am afraid that I have no statutory powers in relation to the Midland Red. The T.H.C. has no controlling interest in this subsidiary. Therefore, until my new proposals are put before the House I am afraid I cannot meet the request of my hon. Friend.

Mr. Edward M. Taylor: If a company of this sort is dealing with the public, why should it not have full powers to protect the public interest in the way it thinks best?

Mrs. Castle: I am sorry, but I do not think the public would share the hon. Member's view.

Mr. Peter Walker: asked the Minister of Transport why she has advised the Transport Holding Company that no further minority interests will be allowed when acquiring new transport undertakings.

Mrs. Castle: Full ownership of these road haulage undertakings will facilitate integration of all publicly-owned freight services as proposed in the White Paper on Transport Policy.

Mr. Walker: Is the Minister aware that the Transport Holding Company has made it clear in its Annual Report that until the Minister gave it a directive in April, 1966, it had found that leaving a minority interest was to the advantage of continuity of management and giving incentives? Is she against both these things?

Mrs. Castle: I am in favour of the integration of road and rail services through the National Freight Organisation. The hon. Gentleman is not. On that we differ. My policy fits in with my proposals for integration.

Mr. Walker: This is nothing to do with integration. Leaving a minority interest to enable the Transport Holding Company to acquire efficient companies with continuity of management is in the public interest, and the Minister s could act accordingly.

Mrs. Castle: I have always encouraged the Transport Holding Company to acquire voluntarily any undertakings which it considered in its commercial judgment it would be a good thing to acquire. But where there is a minority holding, difficulties obviously arise when it comes to integrating the T.H.C's road haulage service into the N.F.O.

Transport Drivers (Hours of Work)

Mr. Leslie Huckfield: asked the Minister of Transport whether she will give a date when her Department will be in a position to enforce fully the new nine-hour limit on transport drivers' hours of work.

Mrs. Castle: I expect to be able to enforce the proposed new limits on driving from the day on which they are introduced, following the necessary legislative authority in my Transport Bill.

Mr. Huckfield: Is my right hon. Friend satisfied that in this industry, which is already very lowly paid, especially in the basic rate, this proposal will enable sufficient time for the productivity increases to be negotiated which will permit the wage increases?

Mrs. Castle: Oh, yes. I am certainly hopeful that by the time I have got legislative power to make these changes, productivity agreements will have been negotiated.

Mr. McNamara: Is my right hon. Friend aware that some drivers are afraid that they may lose up to £5 a week in their income as a result of the new restriction? Is she also aware that there is a great deal of suspicion about the use of the tachograph machine? What negotiation is she holding with the trade unions about these problems? Unless these suspicions are allayed, there may be a great deal of trouble.

Mrs. Castle: I have had very detailed consultation with the trade unions before putting forward my proposals. They are

certainly acceptable to the trade unions. I am very glad that they have realised that if the new limits are to be effective we must have improved measures of enforcement, including the installation of the tachograph. This is a very farsighted view that the unions are taking.

Vehicle Lighting

Mr. Molloy: asked the Minister of Transport what proposals on vehicle lighting she has adopted as a result of the Working Party's Report.

Mr. John Morris: My right hon. Friend is now studying the Working Party's Report on the Use of Headlamps.

Mr. Molloy: Can my hon. Friend tell the House what is in his right hon. Friend's mind regarding a permanent regulation for the use of headlamps at all times at night?

Mr. Morris: I cannot read what is in my right hon. Friend's mind. This Report, which was published six weeks ago, makes several detailed recommendations. Some of the representatives of the users, the police and the Home Office have reservations, and the National Road Safety Advisory Council will be looking into it at its next meeting. In the meantime, there is nothing I can add.

Motor Cycles (Lighting Regulations)

Mr. van Straubenzee: asked the Minister of Transport whether she is satisfied that in modern conditions a bicycle lamp is adequate as the sole means of front lighting of a motor cycle; and when she proposes to introduce amending regulations.

Mr. Swingler: No, Sir. Most motor cycles are already equipped with adequate front lights, but we are now considering amending existing regulations to make the fitting of adequate headlamps obligatory.

Mr. van Straubenzee: The hon. Gentleman says that he is considering it. Will he add to that helpful answer by giving a time scale? Does he appreciate that it comes as a surprise to many people to discover that the present law permits a mere bicycle lamp to be regarded as adequate lighting on the front of a motor cycle?

Mr. Swingler: The hon. Gentleman is quite right. We have circulated draft regulations regarding four-wheeled vehicles as the result of the report of the lighting Working Party on this subject. My right hon. Friend is urgently considering the question in relation to motor cycles, and, no doubt, we shall issue draft regulations shortly.

Freight Services (Suspension)

Mr. Ronald Atkins: asked the Minister of Transport if she will introduce legislation to restore to users, as under the 1947 Act, the right of appeal to transport users' consultative committees against the suspension of freight services.

Mrs. Castle: This is one of a number of matters now receiving my consideration in connection with the Transport Bill which I hope to introduce in the next Session.

Mr. Atkins: Does my right hon. Friend agree that freight services in a region may be even more important than passenger services? As her experience already tells her that British Railways make wrong proposals for passengers, may they not do it for freight, too?

Mrs. Castle: I appreciate the importance of freight proposals to a region, but by hon. Friend's Question referred to the T.U.C.C.s. As I have said, the future powers are under consideration, in preparation for my Bill.

Conurbation Transport Authorities

Mr. Awdry: asked the Minister of Transport what consultations she has held in connection with her proposals for conurbation transport authorities with the Public Transport Association and other recognised associations representing bus operators.

Mrs. Castle: I have kept all the national passenger transport associations informed of my proposals, and I have offered to discuss with them, if they so wish, any issues they may have to raise.

Mr. Awdry: When the right hon. Lady recently put forward her proposals to local authority and other organisations, did she ask that they be treated con-

fidentially? As all these proposals were published by the Birmingham Post last week, would it not be better to have a wide public debate on the issue now so that the views of all organisations and people concerned could be properly considered?

Mrs. Castle: I have asked for them to be kept confidential, for obvious reasons. The House wants me to consult fully all the organisations and individuals concerned before finalising my proposals. It would, therefore, be wrong to have an official release of the discussions at this stage, because it would make a nonsense of the further consultations which I am holding and shall continue to hold. I have told the House that, before the presentation of my Bill, I shall issue a detailed White Paper to Parliament so that all the implications of my proposals are fully understood.

Mr. Webster: What does the Minister regard as adequate consultation, and how will she make sure that it is obtained?

Mrs. Castle: Adequate consultation consists both in detailed discussion by my officials with the people concerned and in my receiving personally any representations which appropriate organisations wish to make to me. As I said in my original reply, I have offered to discuss this matter with the Public Transport Association.

Mr. Leslie Huckfield: What consultations has my right hon. Friend had with the Transport Holding Company, which has a 50 per cent. shareholding in the Midland Red Bus Company?

Mrs. Castle: I have continuing consultations with the T.H.C.

Mr. Heseltine: Does the right hon. Lady agree that, as the purpose of the proposals she is to lay before Parliament is to improve services for the public, it is more appropriate that these proposals as they now exist should be made public for the public to discuss them in advance of proposals to be put to the House?

Mrs. Castle: I intend to make the proposals public in advance of the legislation, but I cannot make public


proposals which have not been finalised for the simple reason that consultations are still going on. I treat these consultations seriously. It is no good going into consultation with cut and dried decisions in one's mind. One goes into consultation in order to see whether it is right that certain modifications should be made, and, until consultations are completed, there are no final proposals to put to the public.

Foreign Goods Vehicles (Documentation)

Mr. Geoffrey Wilson: asked the Minister of Transport why no measures of inspection are taken to ensure that laden foreign goods vehicles coming temporarily into the United Kingdom are correctly documented with a valid goods hauliers licence, vehicle duty licence, and proper insurance; and whether she will make administrative arrangements to enable the officers of Her Majesty's Customs and Excise to check such documentation when carrying out their other duties.

Mr. Swingler: Foreign goods vehicles temporarily in the United Kingdom are subject to the same enforcement measures on licensing and insurance as British vehicles. We have no evidence to suggest that anything more is necessary.

Mr. Wilson: Is not the Minister aware that the number of these vehicles, particularly furniture removal vehicles, is increasing, and that with the development of roll-on, roll-off ferries it is likely to increase still more? Is it not unsatisfactory that there is no proper test of whether they are properly licensed and have proper insurance? There might be serious consequences in the event of an accident.

Mr. Swingler: Tests are made as they are made of other vehicles, and on an exactly equivalent basis. If the hon. Gentleman has specific evidence of evasion we shall consider it. Customs officers are usually overloaded, and we do not wish to put additional responsibilities on them. But we shall certainly consider any evidence that is submitted.

Mersey Crossing

Mr. Tilney: asked the Minister of Transport what are her plans for a third Mersey crossing between Liverpool and

the Cheshire side; and whether she has given consideration to a low-level bridge east of Garston Docks rising sufficiently to span the Manchester Ship Canal on the approach channel thereto.

Mr. Swingler: The Merseyside Area Lane-Use/Transportation Survey is proceeding on the assumption that a third Mersey crossing will eventually be provided. The nature and timing of such a crossing will be considered further after the survey has been completed.

Mr. Tilney: Would the hon. Gentleman bear in mind that most modern factories are now on the periphery of towns and that motorists do not mind going a few more miles provided that they can keep moving? Will he look at the experiment in Tasmania concerning the bridge over the Derwent near Hobart where the bridge cost one-third of what a tunnel would have cost?

Mr. Swingler: Naturally, we are interested in that and prepared to look at any facts and figures on the subject because the possibility of a bridge is a very likely one. Now that surveyors have been appointed we should wait until they have undertaken their expert survey. Very considerable work is developing in the area, and we have no doubt that as a result of the survey we shall get advice that a third crossing is justified.

Hovercraft

Mr. Rees-Davies: asked the Minister of Transport if she will give details of guidance or instructions she has given to British Railways limiting their freedom to negotiate an agreement with Hover Lloyd Limited regarding their user of Pegwell Bay as a cross channel hovercraft terminal; and if she will make a Statement of policy as regards agreements between private industry and nationalised undertakings in relation to hovercraft.

Mrs. Castle: I gave no guidance or instructions to the British Railways Board about their negotiations with Hover Lloyd. Agreements between private industry and the Board about hovercraft operations would be for the Board's own decision, unless they involved shareholdings.

Mr. Rees-Davies: Then will the right hon. Lady be able to give an assurance that there is complete freedom for British


Rail hovercraft, and also that if it thinks it right to enter into some form of consortium it will not be the subject of any limitation by her?

Mrs. Castle: I can certainly give that assurance. This is a discussion, as the hon. Member knows, about a location rather than any arrangement between operators.

Mr. Gresham-Cooke: If the right hon. Lady has to give guidance in future, will she bear in mind that there is a strong school of thought that believes that large hovercraft will not be safely manœuvreable in and out of harbours like Dover and that it might be safer and better for them to operate out of Pegwell Bay?

Mrs. Castle: This arises on the next Question.

Mr. Rees-Davies: asked the Minister of Transport what representations and what evidence will be given by her at the resumed inquiry into the grant of planning permission for Pegwell Bay regarding the safe operation of hovercraft, passenger traffic and the transport consideration both at Dover and at Pegwell, bearing in mind the important transport aspects of this inquiry.

Mrs. Castle: Responsibility for the safe operation of hovercraft and for seaborne passenger traffic generally rests with my right hon. Friend the President of the Board of Trade. I cannot at this stage anticipate what further consideration may be given to transport links at the resumed inquiry.

Mr. Rees-Davies: Does the right hon. Lady recognise—I am sure she does—that one of the difficulties about these planning matters within the Ministry of Housing and Local Government is that she has a very real interest in the purely transport aspects? If her Department is not able to make known its representations, those engaged in the inquiry will feel that there may be something behind their back. Can she give an assurance that she will ensure that any representations affecting traffic considerations are fully known at the resumed inquiry?

Mrs. Castle: All the road-rail aspects were fully considered at the first inquiry, and the county council gave evidence on the effects on local transport and the rest.

I am still considering whether it will be necessary to supplement this at the second inquiry.

Pensioners (Concessionary Fares)

Mr. Rowland: asked the Minister of Transport what representations she has received from local authorities and local authority associations on the question of extending concessionary fare facilities for pensioners; and when she expects to complete her review of the subject and make recommendations on it.

Mrs. Castle: I have received numerous and helpful representations and views. I am still studying this matter with a view to making a full statement on it early in the next Session.

Mr. Rowland: Is my right hon. Friend aware that the commitment to make such a statement will be widely welcomed, particularly round great cities like Birmingham, especially as she has been considering the matter now for well over a year? Bearing in mind that on 25th January her hon. Friend the Joint Parliamentary Secretary said that local authorities were not in complete agreement about how to go ahead in this matter, can she say whether there has been any progress on this aspect of it in the last six months?

Mrs. Castle: As regards the time that we have taken over these consultations, I am sure that my hon. Friend will appreciate that there is a lot of detail here, a lot of different types of anomaly and different ways in which we can tackle them, some of which are very much more expensive than others. In a situation in which hon. Members press me constantly for different forms of transport expenditure, I have to look at proposals carefully and be sure that I have the correct priorities. With regard to the attitude of local authorities, I think that I am right in saying that, in England and Wales as a whole, only the County Councils Association did not favour an extension of the concessions for the elderly.

Mr. Bessell: May I ask the Minister if she is aware that there will be some disappointment that this matter is being delayed until next Session? Has she taken account of the fact that by allowing cheap fare facilities at off-peak times, she would be increasing the revenue of British Rail and the bus companies?

Mrs. Castle: Certainly, in the costings which we have done on the scheme, we have taken account of the fact that some of the journeys would not have been taken without the concession, and clearly it would be absurd arithmetic to leave that consideration out of account. However, unfortunately there is some evidence that a number of the journeys would have been taken anyway, and that a greatly re heed fare means a loss of revenue in that case. I can assure the hon. Gentleman that our costings take that into account too.

Mr. Blackburn: Will my right hon. Friend make her statement very early in the next Session, because the present anomalies lead to great unfairness as between one area and another?

Mrs. Castle: Yes, Sir. I am very conscious of the anomalies, and that is why I proposed the review. I am very conscious, too, of how warmly and widely welcomed the Government's original Traffic Concessions Act of 1964 was. As I said just now, there are many types of anomalies and many different ways in which we could extend the concession, costing different amounts of money. I have to keep my eye on costs.

Driving Signals

Mr. McNamara: asked the Minister of Transport whether she is aware that certain drivers flash their headlights during daylight with the intention of giving a signal to other road users; and if she will take steps to control this practice.

Mr. John Morris: Yes, Sir. But the flashing of headlights should be regarded as having only the same meaning as sounding the horn as an indication of the presence of a vehicle on the road and not as a signal of intention.
This advice has already been given to drivers and it will be included in the next revision of the Highway Code.

Mr. McNamara: Is my hon. Friend considering introducing legislation on this point, because it can be a very dangerous and misleading practice?

Mr. Morris: All that we are seeking to do is to ensure that the advice which was published in 1962 and 1965 will be

contained in the Highway Code. There is a difference between indicating presence, on the one hand, and a code of signals, on the other. There is value in indicating presence, but it has been found that a code of signals would be dangerous.

Mr. Frederic Harris: Surely this is common practice between drivers of large lorries. It is very valuable to the drivers of such lorries to enable them to indicate that one should pass the other. This does not inconvenience anybody, so will the Minister take no notice of such a nonsensical suggestion?

Mr. Morris: This matter was looked at thoroughly in 1962 and 1965. While it can be encouraging and helpful to some, because of its ambiguities and because different people give different interpretations to it the general consensus is that this is a dangerous practice.

Mr. Blackburn: My hon. Friend says that there are ambiguities. Would he explain what it is supposed to mean? Does it mean that one can go ahead or that the other driver will be going ahead?

Mr. Morris: My hon. Friend has put his finger on the point. Different people give different interpretations to this. It has been looked at very carefully and the general view is that if a code were devised it would not be observed and it would be dangerous in practice.

Stansted Airport

Mr. Biggs-Davison: asked the Minister of Transport what is her estimate of additional traffic likely to be generated in Essex by a third London airport at Stansted.

Mr. Swingler: The Department is in close touch with the British Airports Authority and others concerned about the surface transport implications of the Stansted decision; but detailed traffic estimates cannot be made at this stage.

Mr. Biggs-Davison: In view of the Government's regrettable decision on Stansted Airport, does the hon. Gentleman's Department plan additional traffic lanes on the M11, and how many lanes are there to be?

Mr. Swingler: Naturally the implications of the Stansted decision will be


taken into account when we come to the design stage of the M11. This will depend on the consultations which we are having with the British Airports Authority and others about the traffic calculations to be made. This would be the situation wherever the third airport was placed.

Mr. Webster: In view of my 10 Questions on this subject, what step has been taken to break down the figures for the next five years?

Mr. Swingler: I do not know whether the hon. Gentleman has had the Answers to his 10 Questions, but he will get the Answers which will elaborate the steps being taken in these consultations to get the best possible traffic estimates. These will naturally be taken into account in the road planning in that area.

Mr. Webster: rose—

Mr. Speaker: Order. We cannot have 10 supplementaries.

Mr. Hugh Jenkins: Would the hon. Gentleman not agree that wherever another airport is built it will relieve the road and air traffic from Heathrow?

Mr. Swingler: Naturally whenever traffic is shifted that is so. Whatever view hon. Members take about the Stansted decision, they have to face that whatever decision is made about the location of a new airport a great deal of increased traffic is naturally generated, and this has to be taken into account in our road planning.

Travel Agents

Mr. Milne: asked the Minister of Transport whether she is satisfied with the trade returns of Thomas Cook and Son, travel agents, and other associated travel firms operating under public ownership; and if she will institute an inquiry to examine the methods adopted by these firms to take advantage of the rapid expansion and development of the travel trade.

Mrs. Castle: In 1966 Thomas Cook and Son Limited and its subsidiaries maintained their share of the tourist market and increased their export-handling and foreign-exchange business. I am confident that the new chairman,

who was appointed on 1st June, will ensure that they continue to develop their traditionally leading role in this field.

Mr. Milne: Is my right hon. Friend aware that maintaining business in the present expansion of the travel trade is not enough and that one should not be complacent about the growth of this section of social ownership? While we welcome the appointment of the new chairman, we look forward to substantial improvements in this section of social ownership.

Mrs. Castle: I entirely agree with my hon. Friend that this should be an expanding field. I am sure that the new chairman is fully aware of that and will put all his efforts into developing this important national asset.

Mr. Kenneth Lewis: Would the right hon. Lady like to be really adventurous? Is not this a company which would justify an equity holding from outside so that we get a little denationalisation? It would be of advantage to the company if the right hon. Lady would be adventurous and do this.

Mrs. Castle: I know that the hon. Gentleman is always anxious to horn in on the profits of nationalised industries.

Oral Answers to Questions — ROADS

D Ring Road Proposal

Mr. Molloy: asked the Minister of Transport if she is aware of the frustration and annoyance caused to residents of Northolt and Greenford, Middlesex, by the several D Ring Road proposals; what plans she has for liaison between the residents' associations involved, the Greater London Council and her Department; and when she expects a final decision to be made.

Mr. Swingler: A period of uncertainty for those who may be affected is inevitable when new major road schemes are being planned, but we aim to make this period as short as possible.
I hope that consultations with the local authorities concerned will be completed before the end of this year to enable my right hon. Friend to reach a decision early in 1968 on what route is to be preferred.

Mr. Molloy: Does my hon. Friend realise that the very announcement of these proposals has caused many problems, real and probable, for people living in this area? Is he aware that, in the terrible peradventure that two of these proposals might be adopted—particularly that which runs through Northolt—an entire community could be destroyed?

Mr. Swingler: I am well aware of the anxieties which have been caused. Because different proposals have been put forward, none can yet be adopted. There is still quite a process of consultation to be gone through, and several of the boroughs concerned have asked for more time to study the proposals. I very much regret the delay and the blighting caused thereby. We shall expedite the matter as much as possible, and we hope to make a statement before the end of the year.

Mr. A. Royle: Is the hon. Gentleman aware that there is great concern also about the proposal to run a motorway across Barnes Common, as part of the same D Ring scheme? Will he take steps to ensure, that the uncertainty caused to local residents by the present proposal is removed as soon as possible?

Mr. Swingler: We are consulting about all these things. There were the proposals originally put forward by the Ministry. The Greater London Council has put forward an alternative proposal. We have to consult the London boroughs on the matter. Inevitably, it takes some time, but we shall endeavour to clear the air just as soon as we can.

Mr. Berry: asked the Minister of Transport what further consultations she has had with the various authorities and bodies concerned with the proposed D Ring Road; and when she expects to be able to give approval to the buildirg of the road.

Mr. Swingler: My right hon. Friend has informed interested authorities that it is most desirable that she should have their views on the alignment suggested by the Greater London Council not later than 31st October.
She hopes to reach a decision early in 1968 on what route is to be preferred,

but it is too early to say when the project will be programmed.

Mr. Berry: Would the hon. Gentleman not agree that the D Ring road is a vital factor in the movement of traffic outside London to the North? Will he use his best offices to expedite this, bearing in mind the great progress which was made by his predecessor but one in the previous administration, my right hon. Friend the Member for Wallasey (Mr. Marples)?

Mr. Swingler: We regard this as a vital project. The hon. Gentleman will also be aware that there is great controversy and many conflicting views between our consulting engineers, the G.L.C. and several of the London boroughs. My right hon. Friend has asked the boroughs in particular to speed up their consideration and give her their views. We hope that by the end of the year we shall be able to clear up the matter.

Mr. Whitaker: Is my hon. Friend and constituent aware that several of his neighbours are in a similar state of uncertainty about the route of the Inner London Motorway box? Could he say when the date will be announced for the final decision on this?

Mr. Swingler: As my Member of Parliament realises, that was another question. Nevertheless, we have been in correspondence about the matter. We would like to end the uncertainty as rapidly as possible, but, as he will know, it depends on the speed of negotiations with both the Greater London Council and the boroughs.

M4 (Chippenham)

Mr. Awdry: asked the Minister of Transport during what month and in what year she estimates that construction work will start on the M4 on the part which passes through the Chippenham constituency.

Mr. Swingler: I have nothing to add to the Answer I gave to the hon. Member on 8th March.—[Vol. 742, c. 1512.]

Mr. Awdry: Is the hon. Gentleman aware that during weekends in the summer traffic conditions on the A4 in Calne and Chippenham are now utterly intolerable? Will he do something to accelerate


the construction of the new part of the M4?

Mr. Swingler: We shall certainly consider any further measures of traffic control or management which are put up by the local authorities in this area, but it is inevitable that we follow the statutory processes in fixing the line of the M4. The hon. Gentleman will probably know that we issued more side road orders a month after I gave the previous Answer to him. We are required by statute to wait three months for objections, after which we have to negotiate with the objectors. Inevitably, it takes several months to deal with these objections before we can finally fix the line. I regret the situation in Wiltshire, and we shall try to do anything by temporary measures to alleviate it, if we can.

Road Signs

Mr. Peter Walker: asked the Minister of Transport when a new completion date for the conversion of signs on primary roads and for the change-over of remaining signs will be announced.

Mr. John Morris: The Traffic Signs Regulations, 1964 already require all regulatory signs to be changed by the end of this year.
In the autumn we hope, in conjunction with my right hon. Friends the Secretaries of State for Scotland and for Wales, to consult representative organisations about the conversion programme for other signs and to prescribe a terminal date for the change-over of signs on primary routes. The timetable for the remaining signs will depend on the progress made with primary route signs.

Mr. Walker: Is the Minister aware that originally the date for the primary routes was December, 1967? That date was then taken out. As the Minister himself promised in March that a date would be announced, can we expect that date very soon, and that it will be a date not too far ahead?

Mr. Morris: The hon. Gentleman will appreciate that we must have very full consultations with the local authorities. These will take place and the dates must be realistic in order to ensure that the work meets whatever terminal date is agreed upon.

Midland Motorway Link

Mr. Dance: asked the Minister of Transport why it has been decided to divert future traffic from the Midland Motorway link, when completed, along the A46 to join the M1 in a northerly direction at Narborough instead of building a northern slip road at the M6-M1 junction.

Mr. Swingier: There are shorter connections for northbound traffic provided by A46, A426 and A453, and the likely use of northern slip roads at the M6-M1 junction would not justify the cost.

Mr. Dance: Will the Minister give an assurance that the new road will be completed according to the time schedule, and that the new proposed road will be as effective as the suggested slip road?

Mr. Swingler: Yes, Sir. The development of the Midland motorway links programme is proceeding according to the timetable. If we do not run into further snags it will be completed according to the announcements made. We are talking about the complex between Birmingham, Coventry, Nottingham and so on, and we have no doubt, from a study of the traffic concerned, that this scheme is the best we can devise.

Three-lane Roads (Accidents)

Mr. Tilney: asked the Minister of Transport whether the increase of accidents on three-lane roads with offset double white lines was caused by vehicles crossing the lines; and if she will undertake another experiment with offset white rubber bollards which would effectively prevent such crossing.

Mr. John Morris: Since virtually all the increase in accidents arose along the off-set lengths and not at change-over points, it is probable that disregard of the lines was a major cause.
Bollards could not be used. They would reduce the effective width of the traffic lanes and thus increase the risk of accidents.

Mr. Tilney: Surely that depends upon the width of the bollards? Considering that the country is full of three-lane roads which due to curves, humps and the increase in traffic, are only two-thirds used,


is it not possible for the Ministry or the Road Research Laboratory to devise some methods of using the remaining third more efficiently?

Mr. Morris: I have great sympathy with the hon. Gentleman. This is one of the reasons why we were looking forward to the results of the experiment and hoping that something would come from it. Unfortunately, whatever suggestion has been made, including that by the hon. Gentleman, any continuation of the experiment would have meant an increase in road accidents. This is the difficulty fiat has faced anyone who has tried to look at this very important problem. The figures of increase were staggering. That was why the very important decision had to be made to call off the experiment.

Mr. Bessell: In view of the confusion in the minds of many motorists about double white lines, may we understand from the hon. Gentleman's answer that a motorist may cross a double white line with impunity?

Mr. Morris: No, on no account. What I was referring to was the specific experiments that have taken place where there have been these offset double white lines of three-lane roads. In many parts of the country the double white line is an important facet of motoring, and it has very great uses on long continuous hills where no danger has been caused.

Lloyds Hill, Penn (Improvements)

Mr. Montgomery: asked the Minister of Transport what plans she has for read improvements at Lloyds Hill, Penn, Staffordshire.

Mr. Swingler: A scheme for improving this section of A449 has been included in the trunk road preparation pool.

Mr. Montgomery: Can the hon. Gentleman give some idea when it will actually take place? Is he aware that in 1966 a Ministry of Transport Report showed 480 per cent. overcrowding on the road? Is he aware of the high accident rate there and the serious inconvenience caused by traffic jams in the arm, and that it is very urgent to expedite the scheme?

Mr. Swingler: Yes, Sir; we have no doubt about the entirely unsatisfactory

state there and the heavy over-loading that exists on the road. The hon. Gentleman asks when we can consider it. We can consider it for programming as soon as the preparation of the scheme which my right hon. Friend has authorised has been completed.

Minor Road Improvements (Staffordshire)

Mr. Montgomery: asked the Minister of Transport what plans she has for increasing the amount of money allocated to Staffordshire County Council for minor road improvements.

Mr. Swingler: The allocation of money for future years to Staffordshire County Council for improvements costing less than £250,000 to trunk and principal roads has not yet been finalised. It will be determined on the basis of the relative priority of schemes throughout the West Midland area.

Mr. Montgomery: But is the Minister aware that the Government are not allowing sufficient money to county councils to do essential road works and that there are many schemes in Staffordshire crying out to be done and held back because of lack of money?

Mr. Swingler: I am not sure what the hon. Gentleman is talking about. Improvements to county roads are now the responsibility of the county itself under the new scheme. If he is talking about trunk and principal road schemes, I should very much like to have the evidence that he wishes to present. However, I assure him that more schemes will be programmed in Staffordshire, and that the position with regard to minor improvements to trunk and principal roads in Staffordshire has not been finalised.

M45 Motorway

Mrs. Knight: asked the Minister of Transport when road repairs at present being carried out to the M45 motorway between the M1 junction and Dunchurch will be completed.

Mrs. Knight: asked the Minister of Transport why six miles of the M45 motorway has been cut down for such a long period.

Mr. Swingler: I would refer the hon. Lady to the Answer given to my hon. Friend the Member for Rugby on 5th June. A copy of the Ministry's statement dated 13th February, giving details of the M45 roadworks, is still available in the Library.—[Vol. 747, c. 135–36.]

Mrs. Knight: Will the Minister accept my assurance that there is great dissatisfaction with that reply and the feeling is very definitely that insufficient expediency has been used here, bearing in mind that the M45 motorway is the main artery between London and the Midlands, that a great deal of traffic goes on it, and that to have such a long distance as a one-lane traffic throughway only has raised very serious drawbacks?

Mr. Swingler: I think that the hon. Lady will realise that this is a matter of technical considerations. I do not know whether any of her constituents doubt that the M45 was in need of comprehensive repair, as was the whole of the Ml. Works began in 1962. Very serious consultations took place with the local authorities about the way in which this should be carried out, because no one doubted the need for the road works. We have done our best to avoid inconvenience, but it is inevitable. They will be completed by the end of September.

Mr. William Price: Will my hon. Friend confirm the widely held belief in my constituency that it has been necessary to pull up this road because of the incompetent manner in which it was put down by the previous Administration?

Mr. Swingler: My hon. Friend can judge for himself by the fact that this project was completed and opened in 1959, but was discovered to be in need of urgent comprehensive repairs in 1962.

Mr. Gurden: As the Minister must now be convinced that two-lane motorways cause great inconvenience when repairs have to be carried out, does the hon. Gentleman now accept, what I put to him a long time ago, that there ought to be a widening of these motorways by adding an extra lane?

Mr. Swingler: The hon. Gentleman knows that in the majority of cases there will be three lanes on either side. However, there are areas of the country where there is no traffic justification for such

a measure and, therefore, we should be accused of wasting money and land if we adopted his suggestion.

Mr. Rowland: Does my hon. Friend also recall that the Conservative Administration set aside no funds for repairs to this road and that we are having to pay for them now?

M11 (Roding Valley)

Mr. Biggs-Davison: asked the Minister of Transport what representations she has received from individuals, amenity societies and other bodies against her proposed Roding Valley route for the M11; and what arrangements have been made for a public inquiry.

Mr. Swingler: Sixty objections to the published draft proposals for the M11 have been received, consisting of 41 from individuals, four from amenity societies and 15 from other bodies. The question of a public inquiry is still under consideration.

Mr. Biggs-Davison: May we have an assurance that the ideas of the Epping and Ongar Rural District Council for a route which would save public money and lessen disturbance will be considered fully by the Ministry of Transport?

Mr. Swingler: Yes, Sir. I understand that the Council accepts the line in principle. These proposals for modifications to the route are now being studied by my Ministry's consulting engineers. All the representations made by objectors will be considered, including those which radically alter the route. However, the majority of objectors do not oppose the line of the route, and we are now engaged in considering the modifications which they have put forward.

Better Use of Town Roads (Report)

Mr. Berry: asked the Minister of Transport what plans she has for using the income which her Department's Report,Better Use of Town Roads,states could be raised annually in central London as a result of reclassifying parking control.

Mr. Swingler: The use of revenue from parking charges is a matter for local authorities but my right hon. Friend is considering legislation to enable them to


use revenue from any transport service, including parking, for wider transport purposes.

Mr. Berry: Would not the Minister agree that the maximum revenue would come from increasing parking meters and not from placing restrictions on motorists coming into central London? Would the Minister care to comment on that?

Mr. Swingler: My right hon. Friend has announced that she is considering this report urgently. It involves local authority responsibility and this is something on which she must consult local authorities. However, she has made it clear immediately that she is proposing legislation to widen the power of local authorities to spend the revenue that they get from parking meters.

Eastern Avenue

Mr. Iremonger: asked the Minister of Transport what estimate she has made of the total volume of right turning and crossing traffic on Eastern Avenue between the Green Gate and the Barley Lane roundabout, assuming such traffic were diverted to Aldborough Road. North, or Aldborough Road, South; and how that total volume compares with similar signal-controlled crossings on Western Avenue.

Mr. Swingler: In round figures, it is estimated that in a 16-hour period 3,000 vehicles would turn right on to or off EE stern Avenue at Aldborough Road and 600 would cross this trunk road. This is about half the volume of similar movements at the most lightly trafficked signal-controlled junction on Western Avenue.

Mr. Iremonger: The hon. Gentleman has not answered my Question which asked him to take account of all the turnings on the assumption that the traffic was diverted through this. Can he do that and can he also distinguish between peak hour and other traffic?

Mr. Swingler: We are certainly prepared to carry out further researches, because we are not satisfied with the present position. However, as the hon. Gentleman will know, we are in touch with the borough council about finding a solution to this problem, which may involve the erection of traffic signals.

Oral Answers to Questions — DOCKS

Portbury Dock Scheme

Mr. Ellis: asked the Minister of Transport if she will now announce her decision on the Portbury Dock scheme.

Mrs. Castle: The National Ports Council hope to complete their consideration of the project in the next few weeks, and I will reach my decision as soon as possible thereafter.

Mr. Ellis: Is my right hon. Friend aware that there has been considerable speculation in Bristol that the decision has already been reached and that it is a negative one? Could she again say firmly that a decision has not been reached and when it is likely to be announced?

Mrs. Castle: I can certainly confirm most emphatically that a decision has not yet been reached. In fact, the National Ports Council is still considering its views and will make them available to me very shortly, and I shall then have to consider them. I shall make every effort to announce my decision next month.

SCOTTISH NEWSPAPERS (DISPUTE)

Mr. Dalyell: Mr. Dalyell (by Private Notice) asked the Minister of Labour whether he will now intervene in the dispute between the Scottish Daily Newspapers Society and the Society of Graphical and Allied Trades which has brought to a halt the publication of daily newspapers in Scotland.

The Minister of Labour (Mr. R. J. Gunter): The Scottish Daily Newspapers Society reported this dispute to my Ministry on 10th July and officers of the Ministry have since been in touch with representatives of the Society and of the union concerned to seek information.
I have received no request for intervention and am not proposing to intervene at present. I will, of course, keep in close touch with developments.

Mr. Dalyell: Is my right hon. Friend aware that many people in Scotland, both inside and outside the newspaper industry, are extremely concerned about the


vulnerable future of at least four famous Scottish newspapers lest they should go the way of the News-Chronicle? Would he consider intervening with a view to asking both sides to get together and return to work, after which negotiations should take place? Would he—

Mr. Speaker: Order. A Private Notice Question is an ordinary question and supplementaries must be brief.

Mr. Gunter: I am aware of the vulnerability of newspapers in Scotland and in parts of England, but it must be remembered by my hon. Friend that this is an unofficial dispute and that I have not been asked to intervene.
The general secretary of the union concerned is quoted in the Evening Standard of 11th July as saying that the strike would not be made official, but that the union was very sympathetic. It was a dispute between men and management and the union was not involved and would not, therefore, be taking part in talks at the Ministry of Labour.

Mr. G. Campbell: Is the right hon. Gentleman sure that the strike is entirely unofficial? Will he say whether the interruption today of supplies of newspapers to Scotland from England is a legitimate practice, in the circumstances?

Mr. Gunter: I would not have counted it legitimate. That action was as unofficial as the original strike.

Sir M. Galpern: Can my right hon. Friend say whether any notices of dismissal have been sent, or are likely to be sent, to the members of the reporting and other staffs of the newspapers involved?

Mr. Gunter: I understand that the Scottish Daily Newspapers Society has sent telegrams to the general secretaries of the four unions concerned to inform them that unless the staff resume normal working by the night of 12th July protective notices will be issued to other workers tomorrow, that is, 13th July. The telegram also says that the society will continue discussions on the wage increases only when normal working is resumed.

Mr. David Steel: Will the right hon. Gentleman represent to his right hon.

Friend the Postmaster-General that while Scotland is receiving no newspapers there is grave dissatisfaction with the B.B.C. for not producing an extended Scottish news coverage?

Mr. Gunter: That may be desirable, but I will certainly draw the attention of my right hon. Friend to what the hon. Gentleman has said.

Mr. Emrys Hughes: Can the Minister explain why this dispute has broken out in Scotland? Is it another case of Scottish wages and conditions being worse than those in England?

Mr. Gunter: I could not answer the last part of that question, but, of course, negotiations in Scotland are separate and it was the failure of the negotiations to arrive at conclusions in Scotland which resulted in the strike.

Mr. Edward M. Taylor: While we know that the Minister will do his best to intervene if that is over, may I ask whether he can give us an assurance that when the strike is over he will do what he can to investigate the negotiating machinery within the whole industry, for it appears to be unsatisfactory when a small number of men can put the jobs of so many in jeopardy?

Mr. Gunter: As the hon. Gentleman knows, I have been trying to investigate the negotiating machinery in the newspaper world for a very long time. It still has its mysteries for me, but I will continue my efforts.

Mr. Hector Hughes: Does the Minister realise the very great damage which this strike is inflicting on the trade, industry and commerce of Scotland and that this replies so far today give no indication of a serious effort to settle the strike? Will he adumbrate a more constructive way in which to settle the strike and bring the parties together?

Mr. Gunter: I am not aware of any deep economic reprecussions of a newspaper strike which is about two days old, but I will certainly use what ability I have when the moment is opportune.

Mr. R. Carr: Does the Minister agree with the editorial in The Times this morning that cases like this represent the law of the jungle rather than orderly collective bargaining? Do not cases like


this underline the need for reform of the fundamental legal framework of industrial relations rather than concentrating or a prices and incomes policy?

Mr. Gunter: The right hon. Gentleman is less than his usual fair self. It was because of what he describes as the juairle or tangle, which is always involved in negotiations of this sort, that we have established the Royal Commission whose report I hope will be with us before the en1 of the year.

ROADS (70 M.P.H. SPEED LIMIT)

The Minister of Transport (Mrs. Barbara Castle): Mr. Speaker, with your permission and that of the House I wish to make a statement.
The Road Research Laboratory has now completed its assessment of the 70 m.p.h. speed limit trial, and its Report was published on 8th June. The Report estimated that in 1966, with the 70 m.p.h. limit in operation, fatalities and casualties on motorways were 480 fewer than would have been expected without the speed limit. This was a reduction of about 20 per cent. and included 58 fewer people killed. Also, in clear weather on a 73-mile length of the M1 /M10/M45 complex during the trial period, the accident rate was the lowest recorded —10 per cent. lower than the average for the previous five years. The proportion of injury accidents was also the lowest recorded.
The Report concluded that accidents on main roads were about 3½ per cent. fewer than would have been expected without the limit. On less important roads subject to the limit there appeared to have been virtually no change in the number of injury accidents compared with those expected. There were greater reductions in fatal and serious acc dents and casualties on dual carriageways than on single carriageways, but the extent to which this could be attributed to the 70 m.p.h. limit was uncertain. The limit probably had little or no effect on the single carriageways because speeds as high as 70 m.p.h. are possible only on a few of them.
An inquiry undertaken by National Opinion Polls in February this year showed that 61 per cent. of motorists questioned in favour of a permanent 70 m.p.h. limit on motorways.
Before making up my mind on the course of action to follow I invited and received the views of a wide range of interested organisations. The Report has also been discussed in the National Road Safety Advisory Council. In the light of the evidence now available, it is clear that we must distinguish between motorways and other roads.
So far as motorways are concerned, I accept the evidence of the Road Research Laboratory as clearly establishing that the 70 m.p.h. limit has reduced casualties on the motorways. None of the arguments advanced against the limit convinces me that we should forgo this saving of life and injury. I have, therefore, decided to continue the 70 m.p.h. limit indefinitely on motorways.
I have also decided to retain the 70 m.p.h. limit for roads other than motorways, at any rate for the time being. But the Road Research Laboratory Report makes it clear that if we want to achieve a really worthwhile reduction in accidents on these roads then we may need to consider lower limits for them.
Seventy m.p.h. may well prove to be the right limit for the majority of dual carriageways. But there are others bearing particularly heavy traffic where a limit of 60 m.p.h. might be more appropriate. And this might also prove to be the best limit for main roads other than dual carriageways.
I am not putting these limits forward as firm proposals at the moment. There has been a good deal of Press speculation about my plans for these roads and I want to say now that there is no question of a general limit lower than 70 m.p.h. being imposed before the summer traffic peak. But these are the kind of limits which we are now to investigate and about which I shall be consulting all those concerned.
I also intend to continue indefinitely the ban on slow-moving vehicles from the off-side lane of three-lane motorways which I introduced on a trial basis on 23rd May, 1966. This had been widely welcomed and should help to keep this


lane free for the faster moving traffic subject to the 70 m.p.h. speed limit.
The White Paper on Road Safety published last week stressed that we cannot rely on hunches to reduce the appalling total of casualties from road accidents. The R.R.L. Report is, I believe, clear evidence that the right decision now is to keep the 70 m.p.h. limit on motorways.
We shall continue to watch the effect of this and other limits. I recognise that there are conflicting views among responsible people about just where limits should be fixed, and I can assure the House that if experience shows that it would be right, as our highways network develops, to consider other possible limits or variations of them, upwards or downwards, then we shall not hesitate to do so.

Mr. Peter Walker: May I, first, ask the right hon. Lady, as this is a matter of considerable public interest, where views differ, and since the House has never had an opportunity of debating this subject other than on an Opposition Prayer, whether she will do all that she can to see that the House has a full debate upon both the Report and her decision today?
Secondly, may I ask whether the right hon. Lady is aware that there is considerable objection to the fact that those statistics which support the 70 m.p.h. speed limit have been given considerable publicity by the Ministry and in the Minister's statement today, while those which do not support it, and there are some important ones, have not been given that same publicity?
For example, is the right hon. Lady aware that Table 9 of the Report shows that the fall in the number of people killed and seriously injured between 1964–65, when there was no experiment, was a greater drop than between 1965–66, when there was the experiment? This is an important statistic against the right hon. Lady's case.
Would the right hon. Lady also agree that matters such as the increase of police activity due to there being a speed limit, the installation of different fog lighting, the fact that she has imposed this regulation on commercial vehicles going into the fast lane, will all have affected the statis-

tics on the motorway during the period? Even with these effects, the drop is less than the previous year.
As far as any experiment with a 60 m.p.h. limit—[HON. MEMBERS: "TOO long."] The Minister made a long statement. May I also ask her, if experiments are to take place on a 60 m.p.h. limit, whether this can be done at the same time as the use of the existing limit instead of doing what the Minister has done in this experiment?

Mr. Heffer: On a point of order. I would like your guidance and Ruling on this point, Mr. Speaker. Just now, you pulled up my hon. Friend the Member for West Lothian (Mr. Dalyell) who was asking a supplementary question on a Private Notice Question and yet the right hon. Gentleman on the Front Bench opposite seems to be making a speech on this occasion. May we have a Ruling about these supplementaries?

Mr. Speaker: I am quite sympathetic to the point raised by the hon. Gentleman. I think that I have given a Ruling before. I usually allow some latitude to Front Bench spokesmen on their own particular subject.

Mrs. Castle: I would be only too happy to have this matter fully discussed in the House, but, as the right hon. Gentleman knows, this is a matter for the usual channels. I would be very glad to have this debate, because I believe this to be an important subject. When the right hon. Gentleman tried to accuse me of having been selective in the figures to which I have given publicity, he was being grossly unfair. The right hon. Gentleman also proceeded to give the figures that suited his argument from the same Report by the Road Research Laboratory.
In other words, the House has the facts in front of it. All hon. Members can and should read that Report and come to their own conclusions in the light of the evidence contained therein. This is what we have all to do, and this is what I have done. I am perfectly satisfied that, in the face of the evidence in this Report, I would be failing in my public duty if I were now to abandon the 70 m.p.h. speed limit.
The right hon. Gentleman said that there were other factors influencing this,


and instanced police on the road. Of course, this is one of the purposes of having a limit. This is exactly what happens. Because there is a limit there are more police on the road, and the result of that is a marked reduction in speeds, to which the Report also refers. There is no doubt that a causal connection is established between the reduction in speeds and the casualty figures.

Mr. Hooley: Can my right hon. Friend se y what investigations are going on into the techniques of supervising and checking speeds of vehicles? In my experience, the 70 m.p.h. limit is very widely disregarded—far too widely. I would be interested to know, since she has the extension of speed limits under consideration, whether investigations are going on into the techniques of checking speeds.

Mrs. Castle: All these enforcement problems are primarily a matter for my right hon. Friend the Home Secretary. I am in constant touch with him about how we can improve our enforcement mechanism and procedure. There have been a number of prosecutions for exceeding the speed limit, and the overall result has been just what we wanted, namely, to produce a marked reduction in speeds. This is really what we are more concerned with, rather than merely penalising the motorist.

Mr. Rees-Davies: Surely the right hon. Lady does not want to go down in history under the motto, "Let's Go Slow With Labour"? The real point is that what requires to be done now is to evaluate what are the true causes of the accidents in respect of death and serious injury. Is it not a fact that the main contributory cause in all correlations of accidents arises out of the failure to keep a proper look-out, and that speed plays a very small part?

Mrs. Castle: I agree with the hon. Gentleman that we want to intensify our evaluation of the causes of accidents. This is the whole theme behind my White Paper on Road Safety, which I published last week. This is the whole theme behind my policy, why I am extending the area road safety units and why I am proposing extensive new responsibilities for the local road safety officers.
I agree with the hon. Gentleman that there is no one single cause of an acci-

dent. It is always a complex of causes —very rarely indeed is it one cause. I remain satisfied, not only on the evidence gained in this country, but upon that from other countries, that speed is an important element. I would remind the hon. Gentleman of what I said in my original statement, that 61 per cent. of the motorists want to go "70 miles an hour with Labour".

Mr. William Price: Is my right hon. Friend aware that her efforts to reduce the terrible road toll will meet with the approval of all of us on this side of the House? Will she give an assurance that she will not be deterred by the discreditable activities of the motoring organisations, who are not so much concerned with road safety as with the dubious rights of a minority of lunatic drivers?

Mrs. Castle: I have always said to the House that I do not think that I have any right to make subjective judgments on this matter. I have no right to be influenced by my own personal emotions on any matter. What I sought to do, and this was why we extended the experiment, was to get reliable evidence. I have given the evidence very careful consideration, as I have given all the arguments which have come from different quarters, for different sorts of levels and no levels at all, very careful consideration. I have reached the conclusion that it is my duty to continue this limit indefinitely.

Mr. Bessell: Is the right hon. Lady aware that the 70 m.p.h. speed limit will be widely welcomed and that we also welcome her statement that she will not introduce a blanket 60 m.p.h. speed limit without further consultation? In considering a final decision on the 60 m.p.h. speed limit, will she take into account all the evidence of the effects of a variable limit between 40 and 80 m.p.h. which has been tried in many other countries with great success?

Mrs. Castle: That is one of the things which I want to take into account. I wish to consider the speed limit picture generally on the non-motorways—the variable limit, a blanket limit and all the possible alternatives we could supply. I shall, with consultation, give very careful consideration to those matters before making recommendations to the House.

Mr. Heffer: Is my right hon. Friend aware that all sensible and intelligent motorists will be very happy to go slower on the motorways with Labour rather than to madness and destruction with the Conservative Party? Would she consider bringing in lower limits before the summer traffic reaches its peak, because it is precisely motorists who use the motorways and other roads only in the summer whom I find are very dangerous?

Mrs. Castle: I would rather have further consultations and make further studies before altering the limits on other roads, but, apart from the merits of my hon. Friend's proposal, there is a little legal difficulty. There is a kind of quirk under the Road Traffic Act, 1962, whereby there has to be a gap of two months after an experiment before a new limit can be introduced. Therefore, I may be faced with a choice of having to have a gap or changing the Act.

Mr. Kitson: Would the right hon. Lady consider introducing a minimum speed limit on the motorways very quickly as the practice of driving very slowly along motorways is dangerous? Would she also consider the possibility of increasing the speed limit to 80 m.p.h. in the early hours of, say, the summer months, when there is practically no traffic on the motorways?

Mrs. Castle: I admit that at first sight a minimum speed limit is an attractive

proposition. I have given it quite a lot of thought because I realise that dawdling drivers can be a danger. But there are difficulties of enforcement. There may be certain conditions—weather, traffic, and so on—which make it unavoidable to go below the minimum speed limit. The enforcement difficulties would be great and might succeed in forcing some heavy traffic to use other roads off the motorways, thus increasing the congestion and danger elsewhere.

Mr. Booth: Since the figures show a very marked reduction in casualties on motorways, and to ensure that we do not reach the accident level of 1 million per year by the 1980s, would my right hon. Friend give an undertaking that she will stick to her guns in the application of these speed limits?

Mrs. Castle: I have told the House that I am extending the 70 m.p.h. speed limit indefinitely, but I also pointed out in my statement that as our experience as a motoring country develops, as our motorway network develops, as our driving usage of the motorways improves and as we get a bigger and wider road network, it might be possible and desirable to vary the limits up or down. Although I believe that 70 m.p.h. is right now, I should not like to say that it would be right for ever.

COMPANIES BILL [Lords]

As amended (in the Standing Committee), considered.

New Clause No. 12.—(ADMISSIBILITY IN EVIDENCE OF CERTAIN MATTER.)

An answer given by a person to a question put to him in exercise of powers conferred by —

(a) section 167 of the principal Act (as originally enacted or as applied by section l72 of that Act or section 32 of this Act); or
(b) general rules made under section 365(1) of the principal Act for carrying into effect the objects of that Act so far as relates to the winding up of companies;
may be used in evidence against him, and a statement required by section 235 of the principal Act (statement of company's affairs to be made to official receiver) may be used in evidence against any person making or concurring in making it.—[Mr. Jay.]

Brought up, and read the First time.

3.55 p.m.

The President of the Board of Trade (Mr. Douglas Jay): I beg to move, That the Clause be read a Second time.

Mr. Speaker: We are taking, at the same time, Amendment No. 276, to Clause 105, in page 83, line 28, at end insert:
() A statement made by a person in compliance with a requirement imposed by virtue of this section may be used in evidence against him.

Mr. Jay: The purpose of the new Clause and the Amendment is to give the Board of Trade additional power to carry out inspections of companies when fraud or other abuses are suspected. It has been the experience during recent years that some inspections of companies have taken an extremely long time. In particular, it has been necessary, first, for the investigation by the Board of Trade inspector to be held and, secondly, for a further police investigation to be made. In some cases a period of years has elapsed and there has been a very natural public demand that the process should be speeded up. We came to the conclusion that that was justified and that is why certain additional provisions have been proposed for the Bill.
We are making it explicit that in the case of investigations under Section 167 of the principal Companies Act state-

ments made by persons who are being questioned about the affairs of the company may be used as evidence against them. As the law stands, there are circumstances in which it is explicitly stated that statements made may be used as evidence. In other cases it is not stated one way or the other.
When it is not stated the presumption is that such statements may not be used as evidence.
The new Clause provides that
An answer given by a person to a question put to him in exercise of powers conferred by—

(a) section 167 of the principal Act … or
(b) general rules made under section 365 (1) "—
of that Act—
may be used in evidence against him, and a statement required by section 235 of the principal Act … may be used in evidence against any person making or concurring in making it.
Clause 105 empowers the Board of Trade to require the production of the books or papers of a body corporate and to require statements in relation to them. Amendment No. 276 provides that a statement made by a person when complying with a requirement imposed by virtue of that Clause may be used in evidence against him.
The purpose of these proposals is to enable investigations to be more expeditiously and efficiently made.

Mr. J. T. Price: On a point of order. I should like to consult you, Mr. Speaker, on the question of the progress of the Report stage of the Bill. I ask this question as a member of the Standing Committee which considered the Bill for between three and four months. I notice that we begin the Report stage with 75 pages of new Clauses and Amendments. It would be for the convenience of hon. Members, and would perhaps make better sense of our proceedings in view of other events which have taken place in this Palace during this and last week, if we could be told by my right hon. Friend the President of the Board of Trade, or the Leader of the House, how much progress the Government wish to make with the Bill today.
I give due notice, I hope with respect to you, Sir, in the Chair, and to all my colleagues, and with no disrespect to anyone, that I have no intention of sitting


here all night on this Bill after what has been happening during recent days.

Mr. Speaker: It seems as though I was allowing the hon. Member almost to move the Motion, That further consideration of the Bill be adjourned. I cannot answer the question he has raised, but I think that both sides of the House will at some time come to some sort of agreement as to how long to go on today.

4.0 p.m.

Sir John Foster: My first comment is in line with the intervention of the hon. Member for Westhoughton (Mr. J. T. Price), although it is a little late in the day to make it.
I have rather heretical views about this kind of provision and I welcome any breach of the law that no man must be made to incriminate himself. Writers of crime suggest that this is a protection which criminals have in not being able to incriminate themselves, but in this Clause it is a matter of drafting which I rather regret. The words are:
a statement required by Section 235 of the principal Act may be used in evidence against any person making or concurring in making it.
It is a mistake which detective writers make when they say, "The police said, 'Anything you say may be used in evidence against you'." This phrase may come from some ether Act, but it does not make it better to again use the wrong words. The phrase should be, "used in evidence". Does the President of the Board of Trade pretend that the evidence cannot be used in a person's favour? Expressio unius exclusio alterius.
I suggest that an Amendment should be made to the Clause to take out the words, "in evidence against him". I welcome the provision, but I wish that the right hon. Gentleman could alter the rule that no man must be made to incriminate himself, in all branches of our law.

Mr. Corfield: I endorse the comments of my hon. and learned Friend the Member for Northwich (Sir J. Foster) to the extent that I think new Clause No. 12 purports to amend the principal Act. If we refer to Section 167(2) we find that inspectors have power to examine people on oath. I should have thought that if one

examined someone on oath and could not use the proceedings afterwards even though the examination had been on oath, that would be a nonsense.
This is an example of the Board of Trade legislating and not doing it properly. I would much have preferred to have seen some power to examine on oath put in the Bill and I would have preferred that we should leave out the really ludicrous expression "against him". As my hon. and learned Friend pointed out, it is important that the answer can be used in evidence. It may be that the wording as it stands has restricted the use of these statements beyond what is desirable or what is the intention of the Board of Trade.
Once again—this ties up with what the hon. Member for Westhoughton (Mr. J. T. Price) said—this is an example of really bad legislation which results from bringing in something like eight new Government Clauses at this stage, a stage at which we have to add about 23 extra Clauses to the Bill following statements by the Lord Chancellor in another place that the Bill was not to be allowed to get any longer, anyway. Catching the eye of the Minister of State, I see that he accuses us of adding to the Bill, but this is at his invitation, because he has made such a nonsense of it that unless we added to it we should have a terrible Bill.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause No, 13.—(REDUCTION OF MAXIMUM INTERVALS BETWEEN ACTUARIAL VALUATIONS REQUIRED BY SECTION 5 OF THE PRINCIPAL ACT):

As from the expiration of the period of two years beginning with the day on which this Act is passed. section 5(1)(a) of the principal Act (which, as amended by this Act, imposes on an insurance company to which that Act applies which carries on industrial assurance buiness or ordinary long-term insurance business the requirement that it shall, once in every five years or at such shorter intervals as may be prescribed by the deed of settlement of the company, or by its regulations or byelaws, cause an investigation to be made into its financial condition, including a valuation of its liabilities, by an actuary) shall have effect with the substitution, for the reference to five years, of a reference to three years.—[Mr. Darling.]

Brought up, and read the First time.

The Minister of State, Board of Trade (Mr. George Darling): I beg to move, TE at the Clause be read a Second time.
The effect of this Clause is to reduce the maximum interval which is permitted between actuarial valuations on long-term insurance business from five years as at present in the Insurance Companies Act to three years. This is putting into legislative form the actual practice of the vast majority of insurance companies which, I understand, voluntarily undertake this actuarial valuation at three-yearly intervals.
The hon. Member for City of Chester (M r. Temple) will correct me if I am wring, but I imagine that this is a very prudent course to take. We think it necessary to provide a more frequent check on the solvency of insurance corn-parties carrying on life and other long-term insurance business.

Mr. John M. Temple: I craw the attention of the House at the outset to the fact that this is the first of four new Clauses concerned with insurance. None of these Clauses, so far as I know, has been referred to in any way whatever throughout the whole of the debates on the Bill. For the first time we are presented with an entirely new concept of control of insurance at the very last stage of a Bill which has been to another place and been through a Standing Committee of this House. Now we are presented with four new Clauses which practically speaking, indeed absolutely under our rules, are unamendable.
This is a very severe criticism of the Government. I am afraid that I have to inform the Minister of State that I shall be quarrelling with him considerably, on this stage of the Bill. I know of his very charming manner, but one or two things have come to my attention in recent days which have made me not too receptive to some of the things than he put across in Committee. Nevertheless, that has nothing to do with this Clause.
The right hon. Gentleman said that it was prudent now for life insurance companies to make revaluations at triennial intervals rather than at the usual quinquennial interval. I readily admit that many life insurance companies have moved from quinquennial to triennial and

sometimes to annual valuations, but the right hon. Gentleman used the word "prudent". I emphasise that it is prudent to make annual valuations when a Labour Government are in office because no one knows what variation of interest rates are to take place under a Labour Government. This tremendous uncertainty about the value of currencies which has been introduced by the present party in power and these variations of interest rates which have been very violent have made it very prudent indeed for insurance companies to revalue the whole of their life funds at more frequent intervals.
One of the questions I press on the right hon. Gentleman to answer is: what consultations took place on this matter? I do not know of any consultations, because it was only recently that I knew of the Government's proposal in this respect. I am in fairly close touch with organisations in the insurance world. Has there been any trouble in the life offices? So far as I know, there has not. So far as I know British life assurance has stood, shall I say, in the A.1 class at Lloyd's for many years and I know of no trouble. Is it because there are hints of trouble in the insurance world that this Clause has been brought in?
I would say that it is indeed ironic that the present Administration should seek to bring in triennial revaluations of life assurance funds when they have entirely failed themselves to revalue all the properties throughout this country on a quinquennial basis for rating purposes. It just shows the ability and resourcefulness of private enterprise as opposed to Governmental controlled business. It is a pretty substantial job, the revaluation of life funds.
I do not know whether the Ministry has consulted; therefore, I do not know whether there are sufficient actuaries to carry out these triennial revaluations. It is a very tough job indeed. I gather from the insurance interests that they are willing and ready to co-operate with the Government. That just shows the spirit of private enterprise in getting over difficulties manufactured by the present Government.
I personally would like explanations from the right hon. Gentleman as to the consultations which have been going on because it does seem extraordinary that


at this very late stage we should be presented with this Clause, which, as I say, is unamendable. When the ensuing Clauses come along I shall have some specific comments to make about them, but this Clause, I think, is unexceptionable with regard to its draftsmanship and so possibly it does commend itself in that way to the House.
Nevertheless, it does show the ability of private enterprise to cope with new situations and adapt itself as it goes on, whereas Governments at the present time are quite incapable of carrying out even quinquennial revaluations for rating purposes throughout the country.

Mr. Darling: The answer to the hon. Gentleman is that the Life Offices' Association was consulted about this and approved what we are doing.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause No. 14.—(POWER OF BOARD OF TRADE TO ADAPT SECTION 3 OF THE PRINCIPAL ACT.)

(1) The Board of Trade may, on the application or with the consent of an insurance company to which the principal Act applies,—

(a) by order direct that, for the purposes of section 3 of that Act (separation of funds relating to certain classes of business) in its application to the company, insurance business of a kind specified in the order, not being ordinary long-term insurance business, shall be treated as being such business; or
(b) by order direct that, for the purposes of that section in its application to the company, ordinary long-term insurance business of a kind so specified shall be treated as not being such business.

(2) An order under this section may be revoked at any time by the Board of Trade.—[Mr. Darling.]

Brought up, and read the First time.

Mr. Darling: I beg to move, That the Clause be read a Second time.
I hope that the hon. Member for the City of Chester (Mr. Temple) will not refuse to accept this new Clause.
The effect of this Clause is to give the Board of Trade power to permit insurance companies to treat a category of long-term insurance business as business of another class and vice versa. The

problem which has arisen here is that we are laying down the new classes of insurance business and covering the whole of the classes of insurance business—putting them under supervision, as it were. Some insurance companies, we understand, may be in accounting difficulties to begin with if they are compelled to separate all their classes of insurance for accounting purposes, and we want, of course, to give the Board of Trade some flexibility here so that we can give a dispensation to insurance companies if they wish to join together certain classes of business on which there are accountancy problems.
I am sure that the Clause is acceptable to the House, and I hope that it will be accepted by the hon. Member for the City of Chester.

Mr. Temple: I have had the responsibility of watching these insurance matters as closely as I possibly could, but I do not set myself up as any particular judge of the quality of the new Clauses put forward by the Government. All that I can say is that I do know that this Clause, giving permission for life funds to incorporate other types of insurance, is welcomed by the insurance industry. But I have some detailed comments with regard to the drafting of this Clause and I should like some explanations.
The right hon. Gentleman said that certain other classes of business could be incorporated in the life funds. I know that the normal practice in certain circumstances is to incorporate what is called long-term injury business—in other words, when a person is more or less permanently incapacitated. But as I understand, under this Clause there would be permitted personal accident business as well. I should like to know whether this is the case and whether it includes long-term sickness business.
4.15 p.m.
It is envisaged that an insurance company may make an application to the Board of Trade to be able to carry on this ancillary business alongside its life business. What I should like to ask is; will this Order be extremely definitive as to exactly the amount and type of business which can be carried on within the life funds?
Now I would refer to what 1 call a drafting point and this is with regard to revocation. Subsection (2) of the new Clause says:
An order under this section my be revoked at ny time by the Board of Trade.
I would draw the House's attention to the very different provisions with regard to revocation in new Clause No. 15. In mw Clause No. 15(2) revocation is very much qualified—it "shall not take effect until" certain things happen, but, as far as I can see, under new Clause 14 this revocation can take place at any moment o' time. This, I believe, might create difficulties.
I have in Committee on the Bill pointed out a number of difficulties with regard to insurance, and all the difficulties which I have pointed out I think have been accepted by the Government and have been acted upon subsequently, but we are in great difficulty at the present time be-ca use there is no chance whatsoever, even if I make a good point, of the right hon. Gentleman being able to do anything about it here.
I am concerned about this question of revocation because it seems to me that any big industrial life or life office may well carry on a very large personal accident, personal injury, business within its life funds, and that at some moment of tine the Board of Trade, without any consultation, because there is no provision in this Clause for consultation, may revoke the Order under which that company is being permitted to carry on that business.
What is the situation? Life funds will have within them a large number of policies which will be operative. Will they have to cease to honour those policies? Or will those policies be put in a closed fund? What exactly will happen if there is a unilateral revocation of this Order by the Board of Trade?
Here again, I would draw the right hon. Gentleman's attention to the revocation provision in new Clause No. 15 which are much more co-operative, because new Clause 15 says that
the revocation shall not take effect until
certain things happen, until
such period as may be specified in the order … has expired; and notice … has been published
in the Lonon Gazette, and it goes on to say that

where he does so he shall, within the three days next after doing so, give written notice to the society that he has done so.
In other words, new Clause No. 15 envisages the fact that though there is not consultation at least the life office concerned is put on notice of the intention of the Board of Trade. I myself regard this as being a great defect in the Clause.
Another drafting difficulty in Clause No. 14 is that the words "at any time" are used. Surely it would be right to give a period of notice to the company on a matter of this nature? This assurance business which we are talking about is extremely long-term life business, with which is usually written long-term injury business as well, so there should be no particular hurry, and, in any case, the Board of Trade, I do not think, in these circumstances would have to operate in a precipitate manner. I cannot envisage circumstances in which the Board of Trade would have to act in a precipitate manner.
Therefore I cannot understand why this revocation is not qualified in a certain way, and a statutory reference to consultation at least given.
These are my citicisms of the Clause. No doubt the right hon. Gentleman will be able to meet them. However, the two following new clauses that he is to introduce are entirely new. The Life Offices' Association may know about these matters. But the British Insurance Association knew nothing about them. When I tried to find out about one of the other Clauses, not even the Life Offices' Association knew about them, and the secretary of Friendly Societies' Association had very great difficulty in explaining anything about them and said that their object was extremely obscure.
Therefore, we are dealing with matters which are not simple on the surface but are of a technical nature. It would have been very much better had the Government introduced the new Clauses in Committee so that we could have had a chance of detailed consultation with outside. interests and of tabling Amendments. As it is, the new Clauses appeared in starred form only three days ago, and we have had little chance of tabling Amendments to, them. I hope that the right hon. Gentleman will respond to these questions.

Sir J. Foster: I think it legitmate to complain about the introduction of the new Clauses and to treat these matters as if it were the Committee stage, because we have not had the information which we should have had in detail.
My hon. Friend the Member for the City of Chester (Mr. Temple) may know in what circumstances companies will find themselves in accounting difficulties. But I should like to know the criteria which the Board of Trade intends to adopt in regard to accounting difficulties. Is it sufficient for a company to say "We are in accounting difficulties", and then it can merge the two classes of insurance?
I should also like to know more about revocation. What are the criteria for revocation? Is it only a matter of the company saying, "We can now get along in accounting by separating these classes."? It does not sound as if that would be the answer. Or will the Board of Trade suddenly say that the Order ought to be revoked for some criteria? I should like the hon. Gentleman to state the kind of instance in which the Order would suddenly be revoked where the Board of Trade had made an Order to say that long-term accident business should be included in life business.
When one is looking at the accounts of a life company, will the fact that an Order has been made be included in the information given by the company? To estimate the situation of the fund it seems necessary to know whether it is borne by the pure fund which has only life business in it or the impure fund which has personal accident business in it. Is there any machinery requiring information about an Order being made to be given by companies? Apparently Orders will be made on the application of a life insurance company. Will there be included in the Order provision that the fact that the Order has been made shall be included in the published accounts? That ought to be done.
I also disapprove of the kind of drafting where one deems one thing to be another. It has been done in the past. The Dogs Act, 1927, deemed the expression "cattle" to include poultry, which, of course, was rather unwise. A judge in the 19th century referred to a case in which it was said that a married man with 11 children was to be con-

sidered as a married man with no children and commented that if he knew the case he would not agree with it. It is a very unwise form of drafting to say that one may treat one thing as another.
A new approach ought to be made. It ought to be said that ordinary long-term insurance business shall be treated separately but that—the reasons should be set out in the Act—if it appears to the Board of Trade that for the purpose of accounting in a particular company it is necessary to include other business, then such other business shall be included—not "be treated as such business" because that brings in a completely different philosophical complexion. If one is to treat cows in one way and then one wants to include asses, one says, "Asses shall be included in the treatment". One does not say that asses shall be treated as if they were cows. It is only a matter of drafting, but this sort of thing produces with laymen a very unreal philosophical complexion.
However, the Clause is unamendable. We can only hope that as time goes by the Government will improve their ways in drafting. I agree that 13 years of Tory rule did not often improve these things, but I always hope that some Government will do so. However, it is a long long road.

Mr. Darling: I agree with a great deal of what the hon. and learned Member for Northwich (Sir J. Foster) has said. He will remember that during the Committee stage we came to almost a brotherly agreement that what ought to be done with legislation of this kind is to get it sorted out before it is drafted and that some House of Commons Committees for that purpose would probably not come amiss but would improve legislation.
Here we are trying to do good and be helpful. We have received representations on these points and are trying to respond to them, admittedly at the last minute, but I think it far better to make an effort rather than leave out of the legislation altogether the good work that we are trying to do. I shall come in a moment to the drafting arguments raised by the hon. and learned Gentleman when I deal with the substance of the criticisms


made by the hon. Member for the City of Chester (Mr. Temple).
The hon. Member for the City of Chester was right in the first question that h 3 raised about personal accident insurance. Under the Clause, the Board of Trade would be empowered to allow short-term personal accident business to be counted as ordinary long-term insurance in certain cases so that the accounting difficulties of the companies concerned could be overcome. Conversely, it could be done the other way round, depending on what the company wanted.
The hon. Gentleman tried to draw a parallel between new Clause No. 14 and new Clause No. 15. What the Industrial Assurance Commissioner is concerned about in new Clause No. 15 is the public who are paying the insurance premiums, whereas Clause No. 14 tries to help companies overcome certain of their internal problems. This comes to the point made by the hon. and learned Member: if one d Des a great deal of switching, how will people know that the switching has taken place? The answer to that is that the new Clause says:
The Board of Trade may, on the application or with the consent of an insurance company".
Therefore, one would know in the case of a particular insurance company whether and to what extent any change was made in the qualifications. Frankly, we do not see any difficulty here. If difficulties arise, we shall have a chance before long, as hon. Members know, of introducing certain amending legislation in the new Bill.

Sir J. Foster: I do not see how a member of the public would know that the company had applied or consented unless there was something in the accounts.

Mr. Darling: I do not think that there is a public interest in that sense here. What we are trying to do, as the hon. and learned Gentleman will recollect from the discussions that we had in Committee on the new insurance Clauses, is to make sure that all the insurance companies in this country are absolutely solvent, properly conducted, and so on. Tie vast majority are.
4.30 p.m.
To find out whether they are properly conducted—we have given ourselves powers of investigation and the like which have been generally approved—we want also to look at the accounts. In looking at them, the Board of Trade Insurance Department will know whether any changes have been made in the classification of an insurance company. As the fact that in this matter the Board of Trade is in consultation with the insurance industry is a public safeguard, I do not see that any issue of the kind raised by the hon. and learned Member would arise.

Sir J. Foster: Would not a prudent person who seeks a policy look at the life funds to see what was the security and the likelihood of profit? Somebody might want to look at the accounts and calculate one table against another and see how the funds had been invested in the past. That purpose would be falsified if one could not tell that the life fund had started with, say, £X and had then had £Y added to it.

Mr. Darling: I do not think that the situation would arise in that way. The dispensation will be given not for vast classes of insurance business, but only where, in the case of a particular company, it has a small area of insurance and, if it tried to keep that small area separate, it would get into accounting difficulties. The best thing to do is to let that slip over into another class, perhaps, for the time being this is where the revoking comes in.
If it appears to the Board of Trade that the size of that peripheral business is so greatly increased that it should come into its proper classification, the Board of Trade could make that representation to the company or the company could make representations to the Board of Trade and say, "We no longer require for our accountancy convenience the dispensation which you have given us." I do not think, therefore, that these difficulties will arise.

Mr. Temple: I asked what would happen to policies which had been written when a revocation Order takes effect.

Mr. Darling: I was just coming to that.
The hon. Member for the City of Chester raised the question of insurance premiums. All insurance premiums must


be honoured to the end of the life of the premium. I do not know the technical term; the hon. Member knows more about it than I do. Changes in classification if they are revoked will not affect the premium so far as the customer is concerned.

Mr. Temple: I appreciate that. We are, however, dealing with long-term life assurance. The fund may be operating personal accident business alongside life assurance which continues for the life of the person in question, perhaps 50 or 70 years. That closed fund, operating on the basis on which it took the premiums for 70 years onwards, might have a revocation order put upon it by the Board of Trade, when one would think that it had stopped that type of business, whereas it was still carrying it on.

Mr. Darling: The new company will, of course, have to honour—as all insurance companies will do, whatever the accountancy procedures—the contracts that it has entered into. I do not see any difficulty. In any event, the Board of Trade is giving itself flexible powers which, I am sure, will be sufficient to overcome any problems of that kind.

Mr. John Peyton: The Minister of State will have to realise that he must be patient with the House, the mental powers of which have been considerably damaged by his right hon. Friend the Leader of the House. I am not aware that the right hon. Gentleman has answered adequately the point made by my hon. Friend the Member for the City of Chester (Mr. Temple) concerning revocation. I concede at once that the right hon. Gentleman always does his best and is exceedingly courteous and helpful, and I hope that he will try to explain the position, at least for my benefit.
The new Clause states that to initiate revocation
The Board of Trade may, on the application or with the consent of an insurance company",
take certain steps. It appears, however, that the Board of Trade is not obliged in any way to consult the company. I appreciate that, in practice, the Board of Trade might well as a matter of courtesy consult and notify a company, but the House of Commons would not be well

advised to assume that there will be permanently in the Board of Trade a person like the right hon. Gentleman, who would always behave in such a proper and fair manner. Parliament should look carefully at these things and write into the Clause a duty to consult before revocation is made.

Mr. Darling: The hon. Member is, I think, labouring a point which does not deserve to be laboured, for the following reason. Board of Trade Ministers may come and may go—and I appreciate the hon. Member's kind remarks about myself—but he will find that over the years, whatever party has been in power, the people responsible for running the insurance department, as with other department of the Board of Trade, have not only been sensible and competent, but have always, as I think that the hon. Member for the City of Chester (Mr. Temple) would agree, been in the closest contact with the insurance organisations.
Whether it is written in or not, revocation means that if the Board of Trade thinks that the peripheral business in any insurance company has become so big that it should now come into its appropriate class and should not be spatchcocked into another class for convenience, the Board of Trade would say that to the company; and by agreement, to suit the company's business—one does not want to place any handicaps on the company's business—at a convenient point the Order would be revoked. Alternatively, as I have said, the company could say to us, "You will see from our last accounts that our peripheral business has now grown big enough to come into a class of its own. We would like this to be revoked."
Although, to begin with, we are trying to help the company by easing its accountancy problems in the way in which I have described, I imagine that many companies will get into further accountancy difficulties unless they make the changes when the peripheral business is big enough for those changes to be accepted.
I feel sure that this will work out satisfactorily, but there will be an opportunity to test it from experience and to make Amendments, if need be, in a further Bill. I do not, however, think that any Amendments will come forward or be suggested by the insurance companies.

Mr. Corfield: I hope that I may be able to make a constructive suggestion to the Minister of State. It is clear that as his right hon. Friend the Leader of the House is much more interested in preserving the energies of the House to deal with Private Members' business tomorrow night, we shall not make all that amount of progress on the Bill today. There will, therefore, be plenty of time for the right hen. Gentleman to put down another new Clause, which will not be starred by the time we come to the second day on the Bill.

Mr. Darling: This new Clause was not starred.

Mr. Corfield: I am not suggesting that it was. There is plenty of time to put d awn another new Clause and get the starring over. It would be helpful to have another new Clause to meet the pints which have been raised by my hon. Friends the Members for the City of Chester (Mr. Temple) and Yeovil (Mr. Peyton).
During our long Committee proceedings, the Committee showed itself sensitive to giving to Government Departments, and not merely to the Board of Trade, powers without any form of right to representation or appeal. Here, a power to revoke at any time is specifically written in. This is something against which we should be on our guard in view of the general attitude of the Committee to that sort of thing. The hon. Member for Westhoughton (Mr. J. T. Price) joined w on a number of occasions in Committee in our objections to giving unnecessarily wide powers. The Board of Trade seems to have taken unnecessarily wide powers.
Another matter which springs to my attention, again at the suggestion of my hon. Friend the Member for the City of Chester, who knows so much more about the details of these things than most of us, is that there is no specific power to vary an Order. I suppose that where the initiative comes from the company an arrangement could be made by which the original Order was revoked and a modified Order substituted instantaneously, but there is nothing in the Clause to suggest that the initiative has always come from the company. It is clear that, although it has to have some kind of consultation before making an Order,

the Board of Trade needs have no such consultation before revoking it, and so we could get into a state of affairs in which a company could be faced with a very awkward situation.
I am not suggesting for a moment that the right hon. Gentleman or the officers of the Board of Trade would deliberately set out to be silly, or to put a spoke in the wheel of a particular company, but it is a basic principle of the House that we should not give powers of this sort when they are not necessary, and it is clearly not necessary to give the Board of Trade power to revoke at any time at its whim when the apparent object of the exercise is to help particular companies.
Another question which I find rather difficult—this may be merely because I have not done enough homework, although I have done a lot—is to find out precisely how this Clause, which is really an Amendment to the principal Act and does not come into the Bill, is affected by what may be called the enforcement provisions in the Bill.
If the Board of Trade is to police a company in respect of which an Order has been made to find out whether this division in its accounts should continue or be reversed, one would like an assurance that the powers being given by the Bill will apply to the Clause. If they do not, what the right hon. Gentleman has said as to the Board of Trade keeping an eye on the situation may be impossible to implement.

Mr. Darling: Quite frankly, we do not need to spell out any of these powers of the Board of Trade. We are dealing here with responsible insurance companies and what we are trying to do is to help them to get over one or two of their accountancy problems arising from the provisions which we have made and which have been generally accepted and approved for the new classifications of insurance. With this kind of company we do not need any powers to say that if it does not carry out the instructions of the Board of Trade, it may be taken to court or something like that. We must give ourselves some flexibility and some common sense in a matter of this kind.
For those reasons, as the hon. Member for Gloucestershire, South (Mr. Corfield) knows very well, his proposal that we


should take back this new Clause and attempt to redraft it is making a mountain out of a molehill. All we are trying to do is to be as helpful as we can to protect reputable businesses.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause No. 15.—(POWER OF INDUS- TRIAL ASSURANCE COMMISSIONER TO EXEMPT NORTHERN IRISH COLLECTING SOCIETIES FROM PROVISIONS OF INDUSTRIAL ASSURANCE ACTS 1923 TO 1958.)

(1) The Industrial Assurance Commissioner may, on the application of a collecting society registered in Northern Ireland, by order exempt it from any provision of the Industrial Assurance Acts 1923 to 1958 if he is satisfied that the existence of a provision of an enactment of the Parliament of Northern Ireland renders it unnecessary for the first-mentioned provision to apply to the society.

(2) The Industrial Assurance Commissioner may by order revoke an order made under the foregoing subsection with respect to a society, but the revocation shall not take effect until—

(a) such period as may be specified in the order (which shall not be less than the four weeks next after the making thereof) has expired; and
(b) notice that the order has been made has been published in the London and Edinburgh Gazettes;
and where he does so he shall, within the three days next after doing so, give written notice to the society that he has done so.—[Mr. Darling.]

Brought up, and read the First time.

4.45 p.m.

Mr. Darling: I beg to move, That the Clause be read a Second time.

Mr. Deputy Speaker (Sir Eric Fletcher): With this I think that it will be convenient to discuss the Government Amendment No. 270.

Mr. Darling: That would be convenient, Mr. Deputy Speaker, because that Amendment is consequential on the new Clause which is the new Clause mentioned by the hon. Member for City of Chester (Mr. Temple) when he said that he had been in touch with the Friendly Societies' Commissioner, or whoever it was, who said that he knew nothing about it.
Here again, we are trying to do good and being attacked for doing it. We

discovered—I do not know whether I ought to apologise for the fact that we discovered it at the last moment—that by making it clear that friendly societies registered in Northern Ireland could do business in this country and that friendly societies registered in this country could do business in Northern Ireland, which everybody accepted as being desirable, because, Northern Ireland being a part of the United Kingdom, we did not want to put any obstacles in the way of business between the two—I ought not to say between the two countries, but between the Province of Northern Ireland and Great Britain—we were likely to create a dual obligation which could be serious.
What we are doing is to exempt a Northern Ireland society from any of the provisions of the Industrial Assurance Acts where we are satisfied that the legislation in Northern Ireland renders it unnecessary for a particular provision of those Acts to apply. So far as I know, there are no examples of a Northern Irish society carrying on, or planning to carry on, business in Britain, but if it did, it would have to make a £20,000 deposit here, unless we make this alteration, as well as make a deposit in Northern Ireland, and we think that to be unnecessary.
A Northern Ireland society might like to do business in Great Britain and if it were a company just starting up an extra £20,000 could be quite a burden for it. We do not want to do anything which would impose a dual burden as a result of registration in Northern Ireland rather than registration in this country, or the other way round, and I am sure that our attempt to do good, now that I have explained it, will be acceptable even to the hon. Member for the City of Chester.

Mr. Corfield: There is one matter which puzzles me. I do not know whether this is a matter of Celtic solidarity, but when we are dealing with Northern Ireland companies why does there have to be a publication in the Edinburgh Gazette? That seems very strange.

Mr. Stanley R. McMaster: I welcome what the right hon. Gentleman has said about companies in Northern Ireland and about Northern Ireland being a part of the United Kingdom, which seems a particularly appropriate


comment today when, in Northern Ireland, we are celebrating the Battle of the Boyne. It is unfortunate that this new Clause, which seems to be important, should have been introduced at the last minute, without warning. Because of the celebrations, none of my colleagues is with me in the House today and we have not had time to study the Clause and its effects and, if necessary, to put down Amendments to it.
What does the right hon. Gentleman think its effects are likely to be? Is it possible that societies registered in Northern Ireland will be able to expand their business in Britain for their benefit, and is it possible, under the Government's location of offices policy, for new companies to set up in Northern Ireland, perhaps to help to relieve the unemployment situation there, and carry out and expand a business in Britain as a whole? What research has gone into this matter and who initiated this Clause at this late date? How many societies are affected by it and what is their status?

Mr. Peyton: Even on a day like this, someone from this side of the House should say that to hear the right hon. Gentleman saying at the Dispatch Box that he was trying to do good and being attacked for doing so has moved at any rate some of my hon. Friends and certainly myself almost to tears.
I was so sorry that the right hon. Gentleman should feel so pained. I am bound to say that I thought that he must be wrong, because no one would possibly wish to attack him. Certainly, it was not within the bounds of my imagination that anyone would attack him for having chosen the anniversary of the Battle of Boyne and the triumph of King "Billy" as the day on which to introduce this new Clause.
There is no limit to human ingratitude. However, I am always ready to take advantage of any opportunity to offer a gesture of sympathy to right hon. Gentlemen who are members of this Administration. The opportunities are not always freely given and I had better seize this one.

Mr. Keith Stainton: The right hon. Gentleman was at pains to emphasise that he wished

to avoid the duality of responsibility, but he was not at all explicit. In fact, according to my recollection, he did not cover this point at all. He was not clear that there would not be a diminution of stringency regarding friendly societies based in Northern Ireland and operating in this country. I take the point that one should not increase the stringency of any provisions, but the converse to that is that there should be no diminution.

Mr. Temple: Even at this late stage, it is surprising to find fresh hares popping up. The hon. Member for Liverpool, Walton (Mr. Heffer) will be most interested in this coursing analogy.
I am filled with a certain amount of alarm. I have been studying the Bill for many months and I believe that we shall study it on the Report stage for some time. There seems to be no limit to the number of new Clauses which can be found by the Government at this extremely late stage.
The Government admit that they only discovered this point a day or two ago. I have a letter from the Secretary of the British Insurance Association stating that he consulted the Secretary of the Industrial Life Offices' Association and that he was unaware yesterday of new Clause No. 15. He got going very quickly indeed and sent me a brief, which I received about 15 minutes before the Report stage started. The brief is entirely in agreement with the brief which the right hon. Gentleman has delivered to the House. There seems to be agreement behind the scenes on the advisability of a Clause of this nature.
Although the hare has only sprung up at this moment, it is obviously a pedigree animal, and, therefore, we can recommend the House to accept the new Clause. However, I will give a warning. If the Report stage is protracted, one cannot anticipate what may turn up as a starred Amendment before this stage is finished.

Sir J. Foster: There is a theoretical gap. If the Northern Ireland Legislature were to revoke one of the provisions, there would be a gap of four weeks.

Mr. Darling: That may be so. I should like to look at that; I cannot answer the point off the cuff.
I am very glad to see the hon. Member for Belfast, East (Mr. McMaster) here, but I do not understand why he should be There are no Northern Ireland societies operating in Britain, but this is something that we would like to see developed. If we can establish any insurance offices in Ireland and do anything to persuade them to go there, the hon. Gentleman knows that we shall do our best. At the moment so far as I know there is none. But if any were to start up, we do not want them to start with the financial handicap that they would have to face if the Clause were not accepted.

Mr. McMaster: We are most grateful for this provision, but there is one point that troubles me. If, under subsection (2), an Order is made, what happens to the outstanding business which has been done?

Mr. Darling: The contract must be honoured. There are provisions for the insurance commissioner to make sure that the contracts are carried out.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause No. 16.—(REVOCATION OF PROVISIONS OF COMPANIES' MEMORANDUMS OF ASSOCIATION RESTRICTING CARRYING ON OF INSURANCE BUSINESS):

Any provision of a company's memorandum of association that expressly precludes it from carrying on insurance business of any class shall cease to have effect.—[Mr. Darling.]

Brought up, and read the First time.

Mr. Darling: I beg to move, That the Clause be read a Second time.
I am sorry that I must almost invite the hon. Member for Yeovil (Mr. Peyton) to repeat the speech he made on the previous Clause. I hope that he will not do so, however. I think that it would be better if it were taken in silence on this occasion. But here we are doing good again. I am sorry to say that we discovered this point at a late hour, but that does not stop us from doing good, and I hope that I shall not be prevented in any way from continuing to do so.
This Clause deals with the case where under the Bill, an insurance company has

to bring into supervision a class of business which has previously been exempt from supervision. In many cases the range of insurance business has been conducted under a memorandum of association of the company and certain businesses have been precluded. They are now to be brought in as a result of the Bill. Therefore, the insurance company, to put itself into legal probity under the Bill, will have to alter the memorandum of association.
Under the Companies Act, 1948, the company, to get the memorandum of association altered, must do so by special resolution. This means, according to that Act, that at least three weeks' notice must be given. Therefore, we have a gap of three weeks in which this previously excluded type of business is not properly brought within the scope of the Bill. We think that it will be unfair to expect all the affected companies to anticipate by three weeks or more the passing of the legislation so that they may give three weeks' notice to have their special resolution meeting on the date that the Bill becomes law.
Therefore, to ensure that companies are not suddenly placed in the position of having to cease part of their business, the Clause provides that any restricting provision in an insurance company's memorandum of association shall cease to have effect. In other words, the insurance company can carry on and everything will be all right until the company has held its special meeting and has altered its memorandum of association, so that it can continue to carry on the class of business which had previously been excluded by the memorandum of association.

Sir J. Foster: I do not understand this. If the memorandum of association precludes the company from carrying on any kind of business, I would have thought that the business was ultra vires.

Mr. Darling: It is the other way round. I am sorry that I did not make the position clear. In some cases insurance companies have only one class of business—say, plate glass, credit, or animal insurance. It is specially written in the memorandum of association that the company can do only that class of business. A company may want to alter its memorandum of association. We are now extending the provisions to all classes


of insurance business, and some of these classes may have been precluded previously from supervision. It is required that all classes of business shall be covered, and the company will have to alter its memorandum of association to enable it to come within the legal provisions of the Act.

5.0 p.m.

Mr. Michael Shaw: If a company has a memorandum stating that it is entitled to conduct insurance business except for certain classes, the exceptions will now be removed automatically from the memorandum under the new Clause. If, on the other hand, as I suspect, many companies put it, not in the negative form but in the positive form, that they are empowered to conduct insurance of certain classes, the Clause will not cover such cases. We are not removing the exceptions but merely removing the power to carry on those classes of business for which they have power at present. It seems to me, therefore, that the new Clause will be very uneven in its effect on companies.

Mr. Darling: I shall look into that point, but companies of the type mentioned by the hon. Gentleman would be affected anyhow, because if their memorandum of association stated that they would conduct classes of business, they would go on conducting those classes of business. Where they were precluded, the provisions we now propose in the new Clause would apply. They would alter their memorandum of association, and the period of grace, so to speak, which we are giving them here would allow them to make the alteration without any effect on their business.

Mr. F. A. Burden: I apologise to the right hon. Gentleman for not being here earlier, the point which I have in mind may already been answered. Companies which have their trading area laid down in articles of association cannot alter those articles except after a meeting of which they have given three weeks' notice, this being specifically required for the alteration of articles of association in order to extend the area of trade.

Mr. Darling: That is precisely what I said, and that is the purpose of the new Clause.

Question put, and agreed to.

Clause read a Second time and added to the Bill.

New Clause No. 17.—(SAVING FOR SOLICITORS AND BANKERS.)

(1) Nothing in Part III of this Act shall compel the production by a solicitor of a document containing a privileged communication made by or to him in that capacity or authorise the taking of possession of any such document which is in his possession.

(3) The Board of Trade shall not, tinder section 105 of this Act, require, or authorise an officer of theirs to require, the production by a person carrying on the business of banking of a document relating to the affairs of a customer of his unless either it appears to them that it is necessary so to do for the purpose of investigating the affairs of the first-mentioned person or the customer is a person on whom a requirement has been imposed by virtue of that section.—[Mr. Jay.]

Brought up, and read the First time.

Mr. Jay: I beg to move, That the Clause be read a Second time.

Mr. Deputy Speaker: I think that it would be for the convenience of the House if the following four Amendments were discussed at the same time: Amendment No. 119, in Clause 105, page 82, line 12, at the beginning insert:
'Subject to the provisions of section 175 of the principal Act'.
Amendment No. 120, in page 82, line 12, at the beginning insert:
'Subject to the provisions of the next following subsectio'.
Amendment No. 123, in page 82, line 38, at the end insert:
(2) The powers conferred upon the Board of Trade by the foregoing subsection shall not be exercisable in relation to any body which is, for the time being, exempted from the operation of the Moneylenders Act 1900 to 1927 under section 117 of this Act.
Amendment No. 126, in page 83, line 28, at the end insert:
(5) Notwithstanding the foregoing provisions of this section the powers of the Board of Trade so conferred shall not include power to require a solicitor to produce any books or papers held on behalf of a client or to make any explanation or statement prejudicial to the interests of such client.

Mr. Jay: A little earlier, the hon. Member for Gloucestershire, South (Mr. Corfield) complained that several new Clauses were being added to the Bill at this stage. This was a little unfair, because many of them have been added in order to meet points made by hon. and right hon. Members opposite and


others in Committee, and I am sure that the hon. Gentleman would not wish us to disregard everything said by anyone other than the Government in Committee. This new Clause is an example of a provision proposed to meet a point made by the Opposition, in this case primarily by the hon. Member for Crosby (Mr. Graham Page).
In Committee, the hon. Member for Crosby pointed out that there are provisions in the Companies Act, 1948, which exempt solicitors from certain obligations when investigations are being made into the affairs of a company. At present, under Clause 105(2) of this Bill, any person who appears to the Board of Trade or an officer of the Department to be in possession of a body corporate's books or papers can be required to produce them. Such a person might be a solicitor. Subsection (1) of the new Clause ensures that, under Clause 105, a solicitor cannot be compelled to produce a document, and, under Clause 106, possession cannot be taken of a document in the possession of a solicitor if the document contains a privileged communication made by or to the solicitor in that capacity. That is the point which we were asked to meet. It seems to us to be a substantial one, and that is the purpose of the new Clause. I am sorry that the hon. Member for Yeovil (Mr. Peyton) is not here now to see that we still do not weary in well doing.
Subsection (2) of the new Clause gives a corresponding saving to banks except in two circumstances, either that the bank itself is being investigated—in which case one would not wish to provide a saving of this kind—or when it is not right to give a saving where a bank is being required to produce papers relating to the company which is under investigation, because to do so would frustrate the purpose of the investigation.

Mr. Graham Page: The new Clause fulfils an undertaking given in Committee, and to that extent I am grateful, but my gratitude is for only half a loaf, not for the whole, because the Clause does not go far enough. It does not go as far as the principal Act goes.
We are talking here about what is frequently called the privilege of solicitors or the privilege of bankers. It is wrongly

so called because it is the privilege of clients of solicitors and of customers of bankers not to have their affairs disclosed. To that extent, it is the privilege of the public, that is, the public when consulting a solicitor or when having an account at a bank.
This was clearly recognised under Section 175 of the Companies Act, 1948:
Nothing in the foregoing provisions of this Part of this Act shall require disclosure to the Board of Trade or to an inspector appointed by them"—
and then there follow two paragraphs, one relating to solicitors and the other to bankers—

"(a) by a solicitor of any privileged communication made to him in that capacity, except as respects the name and address of his client; or
(b) by a company's bankers as such of any information as to the affairs of any of their customers other than the company."
The reference there is, in the first case, to communications and, in the second case, to information. It is not restricted to documents. The new Clause, on the other hand, is restricted to the production of documents. To that extent, it is less advantageous to the public than was their privilege recognised under the 1948 Act.
Subsection (1) of the new Clause refers to
a document containing a privileged communication".
Therefore, any statement required of a solicitor concerning his client's affairs would not be privileged under the Clause. The same applies to bankers, the reference in subsection (2) being entirely to documents
relating to the affairs of a customer.
There is this grave difference between the privilege recognised under the 1948 Act and the privilege purported to be given under the new Clause.
I turn now to Amendment No. 126, an Amendment to Clause 105, the Clause under which the Board of Trade may require the production of documents. Under Clause 105(3) the inspector may require not only the production of documents and the production of copies or extracts from them, but he may require any person or body having possession of the books to provide an explanation, which, of course, may be in writing or an oral statement. Therefore, as I understand Clause 105, the inspector could call


upon a solicitor and say, "Here are some books of this company. I want an explanation. It need not be in writing."
Under Clause 105 the solicitor is under a duty by law to give that explanation. It is a duty of which he is not relieved under the new Clause, because it refers only to his production of documents. It does not refer to his duty to give an explanation under Clause 105(3). To that extent the new Clause is inefficient and ieffective, whereas our Amendment No. 126, which would be added at the end of Clause 105, would be effective. It says:
(5) Notwithstanding the foregoing provisions of this section the powers of the Board of Trade so conferred shall not include power to require a solicitor to produce any books or papers held on behalf of a client or to make any explanation or statement prejudicial to the interests of such client.
That shows that the Opposition have read the Government's Bill a little better than they have. We have spotted the subsection and paragraph in Clause 105 which were apparently overlooked when the Government drafted the new Clause.
Concerning bankers, I wish to refer again to Section 175 of the 1948 Act, under which a very wide privilege is Oven to bankers' customers. A company's bankers are not required to produce
…any information as to the affairs of any of their customers other than the company.
The new Clause merely says that the banker shall not be required to produce a document relating to the affairs of a customer. Therefore, he may be questioned by an inspector orally and, since he is under a duty under Clause 105, he could not refuse to answer those questions orally and disclose his customers' affairs.
There are two further severe and substantial qualifications to the privilege under subsection (2) of the new Clause. The banker is not required to produce
…a document relating to the affairs of a customer of his unless either it appears to them"—
the Board of Trade—
that is necessary so to do for the purpose of investigating the affairs of the first-mentioned person…
But, surely, the Board of Trade would not ask for the production of the document unless it was satisfied that it was

necessary? This seems to nullify the whole Clause. The inspector would have no purpose unless he thought that the production of the documents were necessary.
The last phrase in subsection (2) of the new Clause is:
…or the customer is a person on whom a requirement has been imposed by virtue of that section.
In order to have the documents produced, or to force production, the inspector has only to impose a requirement under Clause 105 for the person concerned to produce the books and papers. Therefore, the new Clause does not go far enough concerning the privilege of a solicitor's client, and its effect is absolutely minimal concerning a banker's customer.
We are also able to discuss Amendment No. 123. It too attempts to obtain some exemption from production of documents and giving information under Clause 105, although it is quite different from Amendment No. 126. It would remove from duties under Clause 105 the banker who has received a certificate from the Board of Trade that he is a banker and carrying on a banking business. I should have thought that it is merely a matter of convenience in the administration to include him. By making a banker who has such a certificate subject to the Clause there is a sort of double form of parental control. But one assumes that there must have been a good investigation before the certificate was granted. The Board of Trade has power to revoke the certificate, and I should not have thought that it needed more powers under Clause 105 against a banker with a certificate. That is a separate point from that of privilege and merely concerns administrative convenience.
I urge the President of the Board of Trade, if there is time at this stage, to put down more Amendments to look again at the new Clause to see where it is deficient and to accept our Amendments, particularly Amendment No. 126.

5.15 p.m.

Mr. Jay: I am sorry that the gratitude of the hon. Member for Crosby (Mr. Graham Page) is a little qualified, but I think that he will agree that we have come a considerable way to meet him. I shall certainly consider his points, so far


as it is now possible to do so. An argument can be advanced that we must protect a client of a solicitor, or customer, or client—whichever is the right word—of a bank. But we are also protecting the public in the sense of those who may be injured by some of the practices that a very small minority of companies have carried on. We are trying to strike a balance between these arguments.
I agree that from the point of view simply of the client of a solicitor or a banker the hon. Gentleman can advance quite a cogent argument, as he has done. He can show that the provision we have introduced is not identical to that in the principal Companies Act. However, we have not attempted throughout the Bill, and particularly in the anti-fraud provisions, precisely to follow the 1948 Act. The purpose of quite a number of provisions in the Bill is to vary that Act so as to tilt the balance a little in giving more power to the Board of Trade's inspectors and rather less power of delay to those who are inspected, or investigated.
We hope that we have drawn the balance correctly, and we consider that we have. I know that the hon. Gentleman does not wholly agree, and so far as possible I am glad to examine his points.

Mr. John Nott (St. Ives): The new Clause is a great disappointment to me. It does not go nearly as far as we were led to expect in Committee.
I initially raised the point about bankers and my hon. Friend the Member for Crosby (Mr. Graham Page) initially raised the point about solicitors. I was particularly concerned with the general question of banking secrecy as it effects our overseas customers, and that non-residents of this country would fear that their affairs could be investigated here in a way that could not happen in Switzerland, Germany, France and a whole host of other countries.
In moving an Amendment, my fears were that this could cause some slight damage—I would not exaggerate it—to the overseas business which the banking community carries on. In support of my Amendment I mentioned, as reported in c. 1174 of the OFFICIAL REPORT, Standing Committee E, of 8th June, 1967,

that Section 49 of the Finance Act, 1966, recognised this very point. It allowed banks carrying on overseas business to apply for exemption from the provision which would allow tax inspectors to examine their books. I understand that application has been made by the clearing banks for such a certificate of exemption.
I am therefore disappointed that although the President of the Board of Trade has gone some way to meet the point, he has not gone as far as we would have hoped, because the Clause will not allay the fears of those overseas who wish to deposit money with British banks—fears that their affairs may not be completely secret and private from the prying eyes of the Government. We all know that in this country it is accepted that the Government should be allowed to investigate books in certain cases.
I regard that as an unfortunate fact, nevertheless, it seems to be widely accepted in this country, but it would not be accepted by a Swiss, German, or French customer of a British bank. The right hon. Gentleman should look at his Clause again. I hope that he will do so.

Mr Corfield: I find the argument of the President of the Board of Trade a little less than conclusive. What I do not understand in the first place is his reluctance to incorporate Section 175 of the Companies Act, 1948. By far the simplest way of doing what my hon. Friend the Member for Crosby (Mr. Graham Page) wished to be done in Committee and what my hon. Friend the Member for St. Ives (Mr. Nott) wishes to be done in relation to banks would be to incorporate Section 175 of the principal Act in the Bill.
The right hon. Gentleman suggests that he wants tougher powers in relation to these documents and papers under Clause 105, and that he is, therefore, not prepared to have fairly tight restrictions in respect of solicitors and bankers such as those that exist in the 1948 Act. But in the next new Clause we are to write in that all references to books and papers in the Bill shall be construed as if they were contained in the 1948 Act.
We are to have the curious situation whereby under the 1948 Act all the Sections in relation to inspection, which I


think start at Section 164, are subject o Section 175, but a statement which s extracted from somebody by an inspector in explanation of a book or paper under Section 105(3) will be subject to a different safeguarding provision, namely, that of being included in new Clause 17.
If ever there were an argument for saying that a major change of this sort should be postponed to the next Bill—which is the argument that we have heard ill the time—it is to be found here Surely this is a complete departure from the provisions in the 1948 Act and in no way tied up with Jenkins. The President of the Board of Trade is a little disappointed when I say that he puts forward too many new Clauses. I welcome those which meet points that we raised in Committee, but I dislike very much being told that he thought of something yesterday and put it into the Bill, having refused to take cognisance of many of the arguments that we put forward—while accepting the validity of the points which we put forward to improve the Bill—although he has had weeks to think about them.
If we are to make progress we must get out of the habit of his saying that he has gone some way to meet us. We are all here to improve the Bill, not o play 15-love or 30-love as the Leader of the House plays it in the middle of the night when he enters the Chamber on other matters.

Mr. J. T. Price: Leave out the "love".

Mr. Corfield: There may be something in that intervention.
But I press the right hon. Member to bear in mind that Section 75 of the original Act does this adequately. He has not told us why it is not effective. He has not said that as a result of experience it should not be applied. What he should do is to drop new Clause 17 and to accept Amendments 123 and 126 n my name and that of my hon. Friends, or possibly even Amendment 119, which brings in Section 175.

Mr. J. T. Price: I will not detain the Rouse for more than a few minutes, because I know that my right hon. Friend wants to make progress with subsequent parts of the Report stage. But I must

express some surprise at the rather tendentious attitude of some hon. Members opposite this afternoon. I went through the Committee stage, and I look back on that period as one when we were a harmonious Committee. Some of us, including myself on a number of occasions, expressed our doubts about anything which tended to infringe personal liberty or to give greater powers of investigation to the Government to pry into what should be private, confidential affairs.
But all the criticism this afternoon fails to appreciate the purpose of this new legislation, which seeks to strengthen the Government's hands against fraud. To limit ourselves to legalistic argument about the niceties, and how far we should be able to give the Government power to investigate fraud, is rather beside the point.
It might be useful for me to point out that I have been a supporter of the Government on general lines—although occasionally not a supporter. I should like to treat myself to the luxury of being able to say that on this occasion I think that my right hon. Friend is right and that his critics are wrong. It gives me some satisfaction to be able to say that sincerely.
The hon. Member for St. Ives (Mr. Nott), who has great knowledge of banking, knows that he has been talking rather at variance with some of the things that he said in Committee. In matters of this kind where the ultimate ability of the Government to investigate fraud is a matter of public interest, we cannot create an area of sacred ground, where documents can be shifted into an area of sanctum sanctorum. It cannot say that these must be protected from the prying Government inspectors.
I do not want to be acrimonious or tendentious about this point, but we cannot put into the Bill a Clause which would automatically seal off a little protected area of sacred ground, possibly with an ancient house, which the priests or the bishops could use as a sanctuary for people trying to get away from justice. If we establish that, there will be very clever people in this and other countries who do all kinds of fraudulent things and who would be aware of the fact that they had only to take the incriminating evidence to a certain office,


which might be some client or associate of the company—

Mr. Nott: Mr. Nott rose—

Mr. Price: If I am provoked, Mr. Speaker, I can elaborate the case much more. But I sincerely ask my right hon. and hon. Friends and hon. Members opposite, who for many months have co-operated in trying to make this a good Bill, not to be too niggling or to have too parsimonious an attitude to some of these matters.

5.30 p.m.

Mr. Nott: We agree that it is purely a question of balance. We fully understand that the objective is to prevent fraud, but we do not want the Minister destroying existing, well-run businesses. The only comment made by my hon. Friend and myself was that we feel that the balance is still set too much on one side.

Mr. W. O. J. Robinson: I acknowledge that I am interested in the necessity and desirability of solicitors and their clients being protected. Possibly it is my fault, but I have found difficulty in following the arguments being advanced that the Clause does not give that security and that the provisions of Section 175 ought to be substituted for it.
I have endeavoured to examine the Clause, and I wish solely to deal with subsection (1). The differences are these. The Clause prevents a solicitor from being compelled to produce not a privileged communication, as Section 175 says, but a document containing a privileged communication. I should have thought that that afforded greater protection because, as I see it, a solicitor could say that he would not produce a document because it contained a privileged communication.
Is it seriously argued that the privileged communication itself could be required to be produced because it was not incorporated in a document? If that were the case, I am sure that a solicitor would have sufficient ingenuity to put the privileged communication in a file, with or without other papers, at which time it would constitute a document containing a privileged communication and would be protected from production.
I see, also, that the Clause prevents his being required to produce a privileged communication not only given to him, as Section 175 requires, but made by him. That, again, is an additional protection afforded by the Clause.
Section 175 is silent on the point, but the Clause also prevents an inspector taking possession of a document containing a privileged communication. With respect to the argument advanced by the hon. Member for Crosby (Mr. Graham Page), the Clause gives far greater protection than the existing provision in Section 175.

Sir J. Foster: I must answer that. As I understood my hon. Friend, he said, first of all, that the Clause is not as wide as Section 175, and the hon. Gentleman would know, if he had read Clause 105 of the Bill, that it enables the Board of Trade to ask for an explanation. Therefore, it enables the inspector to ask the solicitor for an explanation about a privileged communication, and that is not covered. The reason why Section 175 did not cover that was because there was no power to ask for explanations.
That is why there is this gap. I think that the hon. Gentleman is bound to agree that the gap exists, that Clause 105 is the occasion for the creation of the gap, and that Section 175 of the principal Act gives no protection.

Mr. Robinson: Would a solicitor not be entitled under the law as it stands, if asked for an explanation, to say that an explanation would require him to produce or give evidence to the contents of the privileged communication, and refuse to do it?

Sir J. Foster: One answer to that is that, possibly, it is not in a document at all. It is possible that the client has made a communication to him and has alluded to it in a document which is in the possession of the inspector. It may be that he has written to a friend saying that he has told the solicitor all about the money which he obtained from X. In that event, the inspector goes to the solicitor and asks if his client told him about the money which he obtained from X, whereupon the solicitor has to say that he did. Then the inspector asks for an explanation of what he said.
However, that is not contained in the document in the possession of the


solicitor but, in another document. The person being investigated may have been asked by the inspector if he had told his solicitor about it, in which case he would say that he made a communication to his solicitor which is privileged, whereupon the inspector would go along to the solicitor and ask him.
I think that the hon. Gentleman is mistaken in saying that the Clause goes further than the Section in the principal Act. It is necessary to include a protection on this score. He is right that "made by or to him" is an extension of Section 175. The point made by my hon. Friend the Member for St. Ives (Mr. Nott) is that Section 175 protects the affairs of customers, while the Clause does nothing of the sort.
One other point is that it would not be possible for a solicitor, asked about a verbal communication before he is asked to put it in a document, then to be asked to disclose something which is in a document.

Mr. Jay: I am encouraged to think that when we have the support of my hon. Friend the Member for Westhoughton (Mr. J. T. Price), we must be right in what we are doing, even though he has lot sought for an answer on this occasion.
Out of courtesy to the hon. Member for Gloucestershire, South (Mr. Corfield), I would say that an additional reason why we have introduced a slightly different provision from that contained in Section 175 of the principal Act is that Section 167 of the principal Act goes wider than the powers which we are giving ourselves here. Under Section 167 of the 1948 Act, a solicitor may be required to give explanations about any matter, whereas here we are dealing with explanations about the papers which he is asked to produce.
I would make this comment on what the hon. Member for St. Ives (Mr. Nott) said. He had anxieties about documents being required from banks. He exaggerates the difficulty if he thinks that British banks would be put at a disadvantage as compared with overseas banks. In the first place, we are dealing happily with by no means a normal sort of procedure, but with investigations into occasional cases of suspected fraud. After all, they are very few, and I do not think that this could possibly have the sort of

wide repercussions which the hon. Gentleman fears.
Secondly, in all this, we must leave some reasonable discretion to the inspectors to determine what sort of information it is necessary and judicious to ask for. We cannot wholly lay it down in advance by way of legislation. Though it is a perfectly legitimate point to raise, his anxieties were rather exaggerated.

Mr. Graham Page: On a point of order, Mr. Deputy Speaker. You said, very kindly, that we could discuss Amendment No. 126 with the new Clause. Having regard to the way in which the debate has developed and the issue which has appeared, would you consider allowing that Amendment to be called for a Division when we reach it?

Mr. Deputy Speaker: I must inform the hon. Gentleman that Mr. Speaker has not taken that view. He allowed Amendment No. 126 to be discussed, but he is not permitting a Division on it.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause No. 18.—(INTERPRETATION OF PART III.)

References in this Part of this Act to books or papers shall be construed as if they were contained in the Companies Act, 1948.—[Mr. Jay.]

Brought up, and read the First time.

Mr. Jay: I beg to move, That the Clause be read a Second time.
I hope that this does not put the hon. and learned Member for Northwich (Sir J. Foster) into the philosophical difficulty which was troubling him earlier. The purpose of the Clause is one of definition. In Part II of the Bill, Clause 105 is concerned with the production of books or papers. Clause 106 is concerned with the possession of books or papers. In Section 455(1) of the 1948 Act the expressions "book and paper" and "book or paper" include accounts, deeds, writings and documents. This Clause provides that references to books or papers in Part III shall be construed as if they were contained in the Companies Act, 1948. I hope that the hon. and learned Gentleman will agree that this comes under the category of what he


described as cattle being included in the class of asses rather than treating the one as if they were the other.

Mr. Graham Page: I am not sure that the President of the Board of Trade went far enough in his explanation. If I understand it, the books and papers now referred to in, say, Clause 105 are to come within the meaning of "books and papers" in the 1948 Act, and that definition includes documents.
Section 438 of the 1948 Act refers to falsification of documents. I presume that the real value of the new Clause is that if any of these documents produced under the powers of Clause 105 of the Bill were false or falsified it would be possible to prosecute under Section 438 of the 1948 Act. As I read it, that is the purpose of the new Clause.

Sir J. Foster: Does that include all the new methods of communication like dictaphone reels?

Mr. Jay: The hon. and learned Gentleman would know that better than I. That would be for the courts to determine. We determine here the words in the Act and it is for the courts to determine what they mean.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause No. 19.—(BOARD OF TRADE'S CERTIFICATE THAT A PERSON IS A BANKER TO BE CONCLUSIVE EVIDENCE OF THAT FACT FOR THE PURPOSES OF THE MONEYLENDERS ACTS 1900 TO 1927.)

(1) A certificate given by the Board of Trade that they are satisfied that a person can properly be treated for the purposes of the Moneylenders Acts 1900 to 1927 as being a person bona fide carrying on the business of banking shall, for those purposes, be conclusive evidence that he is so carrying on that business.

(2) If, upon an application (made before the expiration of the period of six months beginning with the day on which this Act is passed) for the issue of a certificate under the foregoing subsection, the applicant satisfies the Board of Trade that he can, as respects a period before the issue of the certificate (whether beginning before or after the passing of this Act), properly be treated for the purposes of the said Acts as having been a person who was bona fide carrying on the

business of banking, they may certify that they are so satisfied (specifying the period in question), and the certificate shall, for those purposes, be conclusive evidence that, as respects that period, he was so carrying on that business.

(3) A certificate given under subsection (1) above with respect to a person may be revoked by the Board of Trade if they cease to be satisfied as respects him as mentioned in that subsection, but the revocation shall be without prejudice to the effect of the certificate as respects any period before the revocation.—[Mr. Darling.]

Brought up, and read the First time.

Mr. Darling: I beg to move, That the Clause be read a Second time.

Mr. Deputy Speaker: It is suggested that with this new Clause there should be discussed the two Amendments thereto: at end insert:
(4) Before exercising with respect to any person the power of revocation conferred by the last preceding subsection the Board shall serve on that person a written notice stating that they are considering exercising that power, the grounds on which they are considering exercising it and inviting the person to make to the Board within the period of one month from the date of service of the notice, any representations that he desires to make with respect to the proposed exercise of power; and the Board may exercise the power after the expiration of the said period, but before deciding whether or not to do so, shall take into consideration any representations so made, and if the person so requests, afford to him an opportunity of being heard by the Board within that period.
(5) Any person aggrieved by the exercise of the Board's power of revocation conferred by this section may within twenty-eight days of the date on which the Board's decision to revoke is notified to him, apply to the High Court for a declaration that he is in fact bona fide carrying on the business of banking;
and at end insert:
(4) As from the day on which this Act is passed, section 6 of the Money-lenders Act 1900 shall. in its application to Great Britain, have effect with the substitution, for paragraph (d) (which excludes from the definition contained in that section of 'money-lender' a person bona fide carrying on the business of banking or insurance or bona fide carrying on any business not having for its primary object the lending of money in the course of which and for the purposes whereof he lends money), of the following paragraph:—
'(d) a person bona fide carrying on the business of banking or insurance or bona fide carrying on a business not having for its primary object the lending of money, in the course of which he lends money';
and also new Clause 20—"Extent of Part V—and Government Amendment


No. 282, and Amendment No. 131: in rage 88, line 32, leave out subsection (2).

Amendment No. 132, in page 89, line 4, leave out '(other than banking)'.

Amendment No. 133, in page 89, line 6, leave out 'and for the purposes whereof' and Government Amendment No. 283.

5.45 p.m.

Mr. Darling: The Government Amendments are consequential on the new Clauses.

Sir J. Foster: On a point of Order. I would ask for your guidance, Mr. Deputy Speaker. When can an Amendment in a group be divided on and when can it not? I understand your Ruling to be that Mr. Speaker had not selected it for a Division. I always understood that, if it was asked for, an Amendment grouped with a new Clause or Amendment could be divided upon.

Mr. Deputy Speaker: Sometimes Mr. Speaker selects Amendments and sometimes he does not select them. He sometimes permits an Amendment to a new Clause to be discussed, but does not permit a separate Division on them. In the Lobby there is a list of Mr. Speaker's Amendments. As the hon. and learned Member will see, in some cases Amendments are starred, which indicate that, if desired, a Division on those Amendments is permitted.

Mr. Burden: Further to that point of order. Does this not create an extraordinary situation? It means that if it becomes clear that an Amendment is of such importance that the Opposition wish to express their disagreement, they are denied the opportunity of so doing, which is rather strange.

Mr. Darling: Further to that point of order. I do not want to quarrel with the hon. Member about the general proposition, but we are here trying to meet the wishes of the Opposition. I do not think that it is possible to have votes on any of these Amendments.

Mr. Deputy Speaker: I think that the hon. Member for Gillingham (Mr. Burden) has misunderstood the position. It is the responsibility of Mr. Speaker to select from among the Amendments on the Notice Paper those which should be called for debate. It is sometimes, as

here, convenient that certain Amendments should be grouped with new Clauses, but, in addition to that, in other cases Mr. Speaker permits certain Amendments in a group to be the subject of a Division, if desired. However, that is not the case with the Amendments selected for discussion with new Clause 19.

Mr. Corfield: Further to that point of order. Surely where we have a new Clause put down by the Government, albeit one which replaces another Clause, the only way in which we can express a view on its drafting, and so on, is to put down Amendments to it, and the only way in which those Amendments can be made, if the Government are not prepared to accept them, is by voting on them. We seem to waste our time if the Government can accept Amendments without a vote, but the House cannot vote on them. I think that we should be allowed to vote on these Amendments at the end of the discussion if we so desire.

Mr. Deputy Speaker: I do not think that any new principle is involved. It has always been the case that a number of Amendments on Report are not selected. There is no different principle involved where Amendments are added to a new Clause.

Mr. Darling: The purpose of the new Clause is to replace what was Clause 90 and is now Clause 117. We had some very interesting and quite constructive discussions on the new Clause, because we were putting into the Bill what was really an Amendment to the Moneylenders Acts to cover a situation that had developed as the result of a court judgment. A number of finance companies, which had very large sums of money at risk, had been acting on the assumption that they got exemption as moneylenders and were classified as banks, but the court judgment put in grave doubt whether they were exempted from the Moneylenders Acts. To cover this position we brought forward Clause 90, now Clause 117, so that we could help them out of this difficult situation.
During the course of the debate on what is now Clause 117 it was pointed out that the way we were proceeding to


help was not satisfactory to what I would call the "undoubted banks". We were, for what we thought were tidy administrative reasons, putting the "undoubted banks", who had had exemption from the Moneylenders Acts in Statutes since 1900, in the same category as any other lending institution which wished to be classified as a bank and, under the terms of the Bill, obtained exemption and received a certificate from the Board of Trade that it was normally engaged in the business of banking.
Therefore, to meet the wish of the Opposition, the clearing banks, the merchant banks and the other "undoubted banks", we are taking out Clause 117 and replacing it with new Clause No. 19. The purpose is that the "undoubted banks" will continue to have exemption from the Moneylenders Acts, as they did before, and that the finance companies and other bodies who lend money in the course of their business will, if they wish their position to be completely legally clear, come along to the Board of Trade for a certificate of exemption. The Board of Trade will then look at the operations of the companies and if they are engaged in lending money, as the finance houses and other bodies do, and ought to be exempted from the conditions of the Money-lenders Acts, they will get exemption.
This has been accepted by the companies concerned whose position has been in doubt as a result of the legal judgment to which I have referred. The retrospective provisions which we have put in will enable the finance companies with the certificates of exemption, as it were, to backdate the exemption so that they cover outstanding loans that they have made to their customers which might be at risk. We have tried to make the position clear by removing undoubted bankers from the need to go to the Board of Trade and ask for an exemption.
We were also asked in Committee to look at the point about revoking certificates of exemption when once they had been granted. We have tried to meet that in subsection (3). What it means is that a lending institution's certificate can be revoked if the Board of Trade should cease to be satisfied that for the purposes of exemption from the Moneylenders Act

he is bona fide carrying on a business of banking.
That revocation, of course, will be without prejudice to the effect of the certificate before it was revoked. In other words, a loan made when the certificate was in force cannot be challenged on the ground that it was made by an unlicensed money-lender. This is the case at present, of course, with an Order for exemption made by the Board of Trade under section 6(e) of the Moneylenders Act, 1900. I think that we have met the views expressed to us and the criticisms about the original Clause 117.

Mr. Corfield: This new Clause does meet—is intended to meet all our criticisms. I corrected myself because one can never be quite sure in these matters. The right hon. Gentleman will remember that when we discussed this issue in Committee, we did so on the assumption that the certificates, or whatever the form of exemption was—the word "certificate" was not used in the old Clause 90—would be revocable. We did not raise the matter in Committee other than to say that we assumed that that was the case, and the right hon. Gentleman nodded. It occurred to me afterwards, as a result of remarks made to me by other people, that this might well not be so and that, therefore, our Committee proceedings were based on a wholly wrong assumption.
Clearly, none of us wishes the Board of Trade to give certificates of exemption and have no power to remove them if the corporate body concerned turns out to be doing something very different from the purpose for which it was given exemption, and so I particularly welcome subsection (3). There is always a tendency on these occasions to stick rather rigidly to Departmental briefs.
Personally, I have always taken the view that it is very easy to put in a provision for the purposes of clarification or for being certain, and I am sure that it is right, but I must admit that my researches, such as they have been, have wholly failed to reveal any authority for the proposition that without subsection (3) these certificates would have been revocable.
The two Amendments arise from the consideration which I gave to the matter


subsequent to the Committee stage, because we had based our Committee proceedings to some extent on this misapprehension. Having turned my mind to the problem of revocation, which we would all agree to be necessary, it occurred to me that this could be a power which could be used by the Board of Trade perhaps on wrong information and that there ought to be a provision similar to that which the Government themselves have provided in Clause 68 when it is decided to remove an authorisation which has been granted to an insurance company. I have largely adopted the words of Clause 68 for the suggested subsection (4).
I know that this is a difficult problem, because the Board of Trade may want to act very hurriedly and in a situation in which it would be unwise to give the company concerned a period of three or four weeks. But the argument is precisely the same as that for Clause 68 when we deal with an existing insurance company which may be running on the rocks, but fir which, nevertheless, the Board of Trade provides a period of a month or 21 days during which the company concerned can make representations.
In both the new Clause and Clause 68 tie action of the Board of Trade in revoking a certificate granted under this Clause, or an authorisation granted under Clause 68, could have very damaging effects on the company concerned. Particularly if the Board of Trade revoked a certificate granted under this Clause, a company could immediately be thrown open to the full effects of being an un1 tensed moneylender.
With the suggested subsection (5), in that event the aggrieved company would immediately have the right to go to the High Court for a declaration simply to emphasise that this was not the end of the road and to emphasise to all possible debtors that it was no good rushing to the courts and refusing to pay their debts on the basis of the Moneylenders Act, because there would still be the long stop of the courts.
I hope that the right hon. Gentleman will agree that this would be a sensible approach. This is a difficult problem, which is why I raised the matter of voting on Amendments to new Clauses.

The Government are sometimes apt to regard an Amendment as a curate's egg, good in parts, and to be prepared to accept some but not other bits, but one cannot split up one's Amendments into endless pieces. My suggested subsection (5) may be unnecessary, but would do no harm, while subsection (4) would be thoroughly useful and in accordance with the principle which the Board of Trade has adopted in respect of insurance companies.
The second Amendment seems to be retaining subsection (2) of the old Clause 90, but, in fact, it does not. What it does is to amend Section 6(d) of the Moneylenders Act, 1900, somewhat differently from the way in which Clause 90 attempted. All it does is to delete the words "for the purposes whereof" at the end of that provision. Paragraph (d) says:
any person bona fide carrying on the business of banking or insurance or bona fide carrying on any business not having for its primary object the lending of money, in the course of which and for the purposes whereof he lends money…
By leaving out the words "for the purposes whereof" some protection is given to the firm which is perfectly legitimately carrying on a business in which from time to time it lends money, although its business is not the lending of money. A number of companies are being attracted to this sort of lending in bridging finance and it seems to us that the best way in which to tackle this problem is to amend paragraph (d). In other words, we have followed the lines of the old Clause 90, but somewhat altered it. The Clause leaves one or two matters outstanding, but that is not a criticism of the Minister of State, because I have only recently thought of them.
6.0 p.m.
There is one point that the right hon. Gentleman mentioned. I still do not understand why the Clause is necessary. We have the curious situation in that under Clause 6(e) of the 1900 Act, the Board of Trade can still give an exemption of this sort. It has, unfortunately, tied our hands by a fixed rate of interest, calculated in a curious manner which I have not yet been able to fathom. I know that from the ordinary 6½ per cent. or 5 per cent. for the ordinary man in the street it becomes 12 per cent. of something.
We have the curious situation that if any company holds a certificate of exemption under Clause 6(e) of the 1900 Act it will be tied to this purely arbitrary interest and arbitrary method of calculation, whereas, once a company gets the certificate under new Clause No. 19, it is entitled to charge any rate of interest that it likes.
It is clear that the Board of Trade can revoke and has powers to investigate. Maybe it is not a serious disadvantage in that it will be able to get round the problem in another way. The problem arises from the fact that the certificate is given to the person, whether it be a corporate person or an individual, and not necessarily in respect of a particular business. Individuals and companies can carry on businesses, under different hats, and there is some danger, more of a danger with an individual than with a corporate body, that the perfectly respectable banking undertaking under one hat would qualify for the exemption, and the certificate would give a complete defence in the case of an action under the Moneylenders Act to another business carried on by the same undertaking. This is something which could lead to awkward results.
As a general conclusion, the Clause as drafted meets the points raised in Committee. It is subject to improvement by way of our Amendments, and I hope they can be added to it.

Mr. Geoffrey Hirst: I rise with a certain amount of diffidence, because my experience of this place tells me that when one has not been a member of a Committee which has spent many hours digesting a Bill like this, it is difficult to intervene. However, one has one's responsibilities as a Member of Parliament. If I appear to be rather stupid I hope that it will be understood that I have not heard all the deliberations that have taken place. I want to be satisfied on one point which I find confusing. I am not sure that I understand it correctly, but is new Clause No. 19 a substitute for the whole of Clause 117? If that is so, we would like it confirmed, because as I read it, it appears to deal very largely with people in some form of banking.
Obviously, I must have got it wrong, because I know that some of my hon. Friends are more satisfied than I, but it does not seem to cover the plight of businesses to which the Amendment of my hon. Friend the Member for Gloucestershire, South (Mr. Corfield) refers:
(d) a person bona fide carrying on the business of banking or insurance or bona fide carrying on a business not having for its primary object the lending of money, in the course of which he lends money.
I must be wrong because I am sure that my hon. Friend would have seen the representations that I am making. In my constituency, I have the principal directors of what is the largest firm in the country, if not in the world, of check traders, a firm which must be well known to all Members, and which, naturally, has been in touch with me. It has had a great deal of help from my hon. Friends on the Committee.
I would not like this to go through without the Minister confirming that I am wrong and that the bona fide busness of that character, which is well known and has been carried on by firms that are recognised as being substantial, complying with every requirement of the Board of Trade as to integrity, nature of business, and so forth, will not be worse off under this Bill than they were when operating previously.
The right hon. Gentleman must have had these representations made to him, and if he could include those comments in his reply I would be grateful.

6.15 p.m.

Mr. Anthony Grant: For some years I have had professional experience of the Moneylenders Acts, and of finance companies. I have found that many of my colleagues including, I am sure my hon. Friend the Member for Crosby (Mr. Graham Page), are very disturbed at the way in which they are likely to be interpreted in the case of loans advanced, sometimes on mortgage by an increasing number of reputable finance companies.
We were told that the amount at risk before the Bill started on its way through the House was no less than £400 million. This is a startling figure, and it was obviously necessary for the Government to do something. While I was glad that


they have sought to rectify this dangerous position, I would have preferred to have seen the Government grasp the nettle rather more firmly, and have a total review of the whole of the Moneylenders Act. I consider the law on moneylenders to be completely out of date. It was designed in an age different from this, and, nowadays, it is more often a vehicle for fraud than one to prevent oppression. Nevertheless, we get some sort of assistance in the Bill. I am very bothered by the new Clause.
I was rather concerned in Committee that all the power to determine whether a person was a bank and whether he should have a dispensation was to be vested in the hands of the Board of Trade rather than in the courts. The definition as to whether one is a bank, as recent cases have shown, have caused learned judges a great deal of anxiety and concern. It is a matter for substantial debate, and it has been reviewed in various learned articles at some length.
I daresay that my hon. and learned Friend the Member for Northwich (Sir J. Foster) is more familiar with this than I am. The Board of Trade boldly does what the Lords of Appeal in Ordinary decided was rather difficult, and says that it can give a certificate that a person can be properly treated for the purposes of the Moneylenders Acts
…as being a person bona fide carrying on the business of banking.
It goes on to say that that shall be conclusive evidence, so that the Board of Trade is way above the Law Lords.
What concerns me is the question of revocation. It was through the assiduity of my hon. Friend the Member for Gloucestershire, South (Mr. Corfield) that this point was drawn to the attention of the Government. Everyone else seemed to have overlooked it in Committee. Hence we have new Clause No. 19(3). As my hon. Friend has pointed out this can be extraordinarily dangerous to a bona fide company. Let us assume that a finance company is lending money, quite genuinely, to the public and advances a considerable amount of money. It goes through the process of getting dispensation, and the certificate from the Board of Trade, which is satisfied that it should have that dispensation.
Then it goes on, lending more money as time goes on, and we reach a period

when it slightly changes the modus of its operation. It might go in for hire purchase or building development. Suppose that this attracts the attention of some official in the Board of Trade. As the Clause stands the certificate can be revoked if the Board of Trade ceases to be satisfied about the conditions mentioned in the first subsection. Nevertheless, because of executive action, the certificate is stopped and all the money which the company has lent—it may run into hundreds of thousands of pounds—can lay the company open to a plea of the Moneylenders Act from its borrowers. If the Board of Trade had taken that arbitrary action of revocation, it would mean the unjust enrichment of borrowers at the expense of what is probably a bona fide company.
The Minister of State, who, I am sure, approaches this matter in the same sense of dissatisfaction about moneylending as I do, will see the point. I commend to him the Amendment which enables notice to be given and allows appeal against the decision of the Board of Trade.
The judges can be appealed against to the Court of Appeal and the House of Lords. Nevertheless, the Board of Trade, in this case, seems to be omnipotent and nobody can appeal further. This is a most serious point. When grappling with the general reform of moneylending law, which I hope will be undertaken, we must try to get the procedure right because there are many people engaged in the perfectly bona fide pursuit of advancing money to people all over the country and they have a number of small shareholders who would suffer very much if the Moneylenders Act could be pleaded.
I hope that we can have an assuring reply from the Minister.

Sir J. Foster: The object of the Amendment in line 16 of new Clause 19 is to protect the company which lends money but whose primary purpose is not the lending of money and which does not carry on banking or insurance. With the sophistication of modern investment, a company which makes boots and shoes may have accumulated a fund of, say, £1 million to extend its factory in two years' time. It should be allowed to lend money on bridging finance without running the risk of being classed as a moneylender. It is proposed that a company, in order not to be classed as a


moneylender, must lend the money in the ordinary course of its business and for the purposes of its business.
To dispose of an argument which at first blush might be put against the point of view which I am advancing, it might be said that if the boot and shoe company lends money that is in the course of its business and that it must be for the purposes of its business because it is to get interest. But that will not do, because no company which lent money in the course of its business would run the risk of being classed as a moneylender. That construction has not been adopted by the courts, rightly, because it is not for the purposes of its business that it lends money on bridging finance. The purposes are not just to earn money. The purposes must be reconciled with the purposes of making boots and shoes.
Therefore, the Amendment in line 16 would improve the Bill and would make the necessary alteration to the Moneylenders Acts and would remove the threat to companies of a dishonest borrower raising the point against them that they are moneylenders.

6.15 p.m.

Mr. Darling: I know the firm to which the hon. Member for Shipley (Mr. Hirst) refers. He is probably aware that representations were made to us. In fact, I saw the people myself. The new Clause will not help them. But I am happy to say that it will not make their life any more difficult. It will not make the slightest difference to their activities. I think that that is the answer which the hon. Gentleman expected, and I am glad to give it to him.
This must be temporary legislation. Hon. Members know my views about the need to amend the Moneylenders Acts. I do not know whether I shall get into trouble by saying that that is one piece of legislation which I would push up the list of priorities. It is long overdue.
The hon. Member for Gloucestershire, South (Mr. Corfield) will not expect me to respond to the solution to all our difficulties which he put forward. It is a very simple solution and I am sure that the Government should consider it. But it is not a solution which I can present to the House today, which may be unfortunate.
The hon. Members for Gloucestershire, South and Harrow, Central (Mr. Grant) raised the point about the Board of Trade suddenly revoking a certificate of exemption given to a company. I do not know how one can write even into a piece of temporary legislation which may continue to be temporary for a long time instructions to the Board of Trade not to revoke a certificate unless it is satisfied that it should be revoked.
One factor which the Board of Trade must take into consideration is the point raised by the hon. Member for Harrow, Central that a lending company has a lot of customers and a lot of money is at risk to it and everybody associated with it, and if the certificate was revoked a borrower could say, "You should not have lent me the money because the Board of Trade has said that you are not exempt from the Moneylenders Acts and as you did not plead the Moneylenders Acts when you lent me the money I will not repay you". If the transaction took place before the certificate was revoked, that would not happen. But the hon. Gentleman would have a substantial argument if he went on to say that any transaction after the certificate has been revoked would be at risk as far as the company was concerned. But clearly the Board of Trade will not revoke certificates if the company is genuinely carrying on a business and if to revoke the certificate would put the company in unnecessary and undeserved difficulties.
I would accept the spirit of the Amendments about an appeal against revoking a certificate, but they are unnecessary, for this reason. If the certificate is revoked, all that has happened is that the Board of Trade has said to the company, "We do not think that you are properly carrying on the business of moneylending for the purpose of getting a certificate. In other words, you are at risk if any of your clients say that the money should not have been lent because you do not have exemption from the Moneylenders Acts". The company can go on conducting its business. It does not stop conducting its business because the Board of Trade revoked a certificate. There is an appeal to the courts if anything happens.
All that would happen after the certificate had been revoked. None of the


transactions before the certificate had been revoked would be at risk. Suppose that after revocation the company continues to lend money until one of its clients pleads in court the Moneylenders Act. If the company is satisfied that it is properly carrying on the business of balking and that the court will give it the certificate that the Board of Trade had refused, that would be a far better legal protection for the company than would be provided by the Amendment.
In other words, if the Board of Trade said to the company, "We will revoke your certificate for reasons A, B, C and D" and if the Amendment were accepted aril the company made its appeal and eventually an appeal to the courts, it would be in a less advantageous position thin it would be without the Amendment, because finally there would be an appeal to the court. It would be a far better appeal to the court on the basis of a shyster client trying to get away with things and the company defending itself against a shyster client rather than defer ding itself from what might have been a genuine mistake on the part of the Board of Trade. That is how we have looked at it.
I know very well that I do not need to assure the hon. and learned Member about this. We have looked at the position of companies in the most generous way and we think that the appeal to the court as I have described, in the way that it might eventually work out if a certificate is revoked, would be far better for the company than to cover the point by the Amendment.
As to the first part of the first Amendment, there is a big difference from a direction given by the Board of Trade under Clause 68, which is a revocation under the Prevention of Fraud (Investments) Act, because a revocation or direction in this case means, for instance, that an insurance company is restricted in he business that it can carry on or, if the operation is that of a unit trust, that the managers of the unit trust are restricted—they could not issue circulars about their business—or that a dealer in securities would lose the status attaching to the exemption which he previously had. There is a great difference here and we would not wish to put into this part of the Bill the same kind of directions as apply under Clause 68.
The final point raised by the hon. and learned Member for Northwich, into which, again, we have looked carefully, concerned a boot and shoe company having a lot of money in the "kitty" and lending it out to somebody else for bridging finance. This is a difficult one.
It is possible for us to rewrite this piece of what, I hope, is only temporary legislation to cover all the possibilities that might arise when companies which are not primarily engaged in the lending of money get involved in the lending of money as bridging finance from the money which they have piled up at the bank or from whatever else it might be.
On frequent occasions in Committee, the hon. and learned Member generously acted as my legal adviser, and so I have to appeal to him again. I am advised by the legal pundits that we would have to go much further in amending the Clause than the second Amendment provides. The retention, as we desire, of the words
for the purposes whereof…a business…not having for its primary object the lending of money, in the course of which and for the purposes whereof he lends money
would give us great flexibility to cover quite a number of cases that might arise.
We see no difficulty in practice, and I am sure that the hon. and learned Member does not, where a reputable boot and shoe company with, as he said, £1 million in the "kitty" knows of a business—there might be friendly relations between the directors—which is in need hurriedly of bridging finance for industrial development and the directors of the two companies get together and those of the boot and shoe factory say, "We will lend you the money you want. We have it standing by for the time being. We have been saving it up for industrial developments of our own." In those circumstances, nobody would plead the Moneylenders Act to get out of the obligations of the loan.
Do we require to go through all the legal difficulties which, I am told, would be involved to spell out the cover which we must give for all the transactions which are likely to arise and which would come within the definition of lending money not for the purposes for which the company was founded?

Sir J. Foster: The boot and shoe company would be at the mercy of the borrower. The right hon. Gentleman presupposes that there are friendly relations between the directors. There might not be. The company might be taken over by somebody else. Gone would be the friendly relations. The company might go into liquidation. The liquidator has to take the point. That is the difficulty. Trustees and liquidators, like Governments, always take the most immoral points.

Mr. Darling: The hon. and learned Member is giving me my arguments. Those, too, were put to me and were advanced as reasons why we would have to go much wider than the Amendment proposes.
For those reasons, we thought that by retaining
for the purposes whereof he lends money
we had covered most of the difficulties which might arise. For the time being at least, so long as we rely on this temporary legislation for the protection that the finance houses and other companies need, we have also to rely on the fact that this executive body will behave sensibly and will certainly do all that it can to cover such cases as the hon. and learned Member has raised. To go over the whole field, however, I am assured that the Amendment would have to be widened considerably.

Mr. Grant: What would be the position of a large company which lent money regularly to its employees to buy their houses and, perhaps, set up a subsidiary company precisely for that purpose? Presumably, it would be a moneylending company. It might or it might not be acting in the ordinary course of its business—I do not know—hut it could be a dangerous situation if the Moneylenders Act were to be pleaded against it. I would appreciate having the right hon. Gentleman's views.

Mr. Darling: I would like to consider the circumstances of such a company. I imagine that if it set up a subsidiary to lend money on mortgages or directly for the employees to pay hack out of their weekly wages or something like that, it might apply to the Board of Trade for a certificate. I would like to consider the matter, and if there are

any difficulties I will let the hon. Member know.

Mr. Michael Shaw: The Minister of State always tries to be helpful in these matters and he has gone some way towards allaying our fears. Having heard all the arguments, however, we still believe that the person who is subject to a possible revocation order should have a right to be heard.
The matter is not quite as simple as the right hon. Gentleman suggests, namely, that if the Board of Trade revokes a certificate, the company has a right to go to court. This may be so, but it is a fairly drastic step to take. Clearly, if a company has a certificate it will have publicised the fact; it will be well known that it possesses this certificate; and, clearly, it is going to be of some hardship well before the possible date of an appeal to the court if it becomes generally known that in fact the certificate has been withdrawn. Therefore, withdrawal of the certificate itself is, in our view, an important event in the business life of the company. It is, therefore, I believe, important that there should be a power of representation to be made to the Board of Trade before the power is exercised.
6.30 p.m.
Consequently, I shall be grateful to you, Mr. Speaker, if I could address you on a point of order on this matter. It is very difficult, considering a new Clause such as this, really to weigh up its merits and to decide whether or not one wants to vote on one's own Amendments to it until one has heard the arguments. We are most anxious to know if you would allow us to vote on the first of the Amendments put down by my hon. Friends and myself to this new Clause.

Mr. Speaker: I am grateful to the hon. Member for putting his request so courteously. I had already received a similar private request from other hon. Gentlemen on the Opposition Front Bench. In the circumstances, I am prepared to allow a Division on that Amendment to the new Clause.

Mr. Darling: Before the Division is called, I should like to repair an omission. I think that earlier on I should have congratulated the hon. Member for Scarborough and Whitby (Mr. Michael


Shaw) on appearing for his maiden effort on that Front Bench. [HON. MEMBERS: "Hear, hear."] He attacked me so pleasantly during the course of the Bill that I should not like this opportunity to go by without some recognition of his appearance there.

Question, That the Clause be read a Second time, put and agreed to.

Amendment proposed to the proposed Clause, at the end to add:
(4) Before exercising with respect to any person the power of revocation conferred by the last preceding subsection the Board shall serve on that person a written notice stating that they are considering exercising that power, the grounds on which they are considering exercising it and inviting the person to make to the Board within the period of one month from

the date of service of the notice, any representations that he desires to make with respect to the proposed exercise of power; and the Board may exercise the power after the expiration of the said period, but before deciding whether or not to do so, shall take into consideration any representations so made, and if the person so requests, afford to him an opportunity of being heard by the Board within that period.

(5) Any person aggrieved by the exercise of the Board's power of revocation conferred by this section may within twenty-eight days of the date on which the Board's decision to revoke is notified to him, apply to the High Court for a declaration that he is in fact bona fide carrying on the business of banking.—[Mr. Michael Shaw.]

Question put, That those words be there inserted in the proposed Clause:—

The House divided: Ayes 100. Noes 177.

Division No. 453.]
AYES
[6.33 p.m.


Allson, Michael (Barkston Ash)
Gurden, Harold
Pike, Miss Mervyn


Awry, Daniel
Hall-Davis, A. G. F.
Pink, R. Bonner


Baker, W. H. K.
Harris, Frederic (Croydon, N.W.)
Powell, Rt. Hn. J. Enoch


Bennett, Sir Frederic (Torquay)
Harvie Anderson, Miss
Pym, Francis


Berry, Hn. Anthony
Hawkins, Paul
Ridley, Hn. Nicholas


Biggs-Davison, John
Hirst, Geoffrey
Ridsdale, Julian


Birch, Rt. Hn. Nigel
Hogg, Rt. Hn. Quintin
Russell, Sir Ronald


Body, Richard
Holland, Philip
Scott, Nicholas


Bossom, Sir Clive
Hunt, John
Shaw, Michael (Sc'b'gh &amp; Whitby)


Braine, Bernard
Hutchison, Michael Clark
Stainton, Keith


Brewis, John
Jennings, J. C. (Burton)
Stodart, Anthony


Brinton, Sir Tatton
Jopling, Michael
Taylor, Frank (Moss Side)


Bromley-Davenport, Lt.-COI. Sir Walter
Kershaw, Anthony
Temple, John M.


Buck, Antony (Colchester)
Lancaster, Col. C. G.
Thatcher, Mrs. Margaret


Burden, F. A.
Legge-Bourke, Sir Harry
van Straubenzee, W. R.


Campbell, Cordon
Loveys, W. H.
Vaughan-Morgan, Rt. Hn. Sir John


CarLisle, Mark
McAdden, Sir Stephen
Walker, Peter (Worcester)


Channon, H. P. G.
Mac Arthur, Ian
Walters, Dermis


Cooper-Key, Sir Neill
McMaster, Stanley
Ward, Dame Irene


Corfield, F. V.
Maude, Angus
Weatherill, Bernard


Craddock, Sir Beresford (Speithorne)
Mills, Peter (Torrington)
Webster, David


Crowder, F. P.
Mitchell, David (Basingstoke)
Whitelaw, Rt. Hn. William


Dalkeith, Earl of
More, Jasper
Wills, Sir Gerald (Bridgwater)


Dance, James
Morgan, Geraint (Denbigh)
Wilson, Geoffrey (Truro)


Dean, Paul (Somerset, N.)
Mott-Radclyffe, Sir Charles
Wolrige-Gordon, Patrick


Deedes, Rt. Hn. W. F. (Ashford)
Munro-Lucas-Tooth, Sir Hugh
Wood, Rt. Hn. Richard


Elllott, R. W. (N'c'tle-upon-Tyne,N.)
Nabarro, Sir Gerald
Woodnutt, Mark


Errington, Sir Eric
Neave, Alrey
Worsley, Marcus


Eyre, Reginald
Nott, John
Wylle, N. R.


Farr, John
Orr-Ewing, Sir Ian
Younger, Hn. George


Foster, Sir John
Osborn, John (Halfam)



Goodhew, Victor
Page, Graham (Crosby)
TELLERS FOR THE AYES


Gower, Raymond
Pearson, Sir Frank (Clltheroe)
Mr. Timothy Kitson and


Grant, Anthony
Peel, John
Mr. Hector Monro.


Gresham Cooke, R.
Peroival, Ian



NOES


Abse, Leo
Bishop, E. S.
Butler, Herbert (Hackney, c.)


Allaun, Frank (Salford, E.)
Blackburn, F.
Cant, R. B.


Anderson, Donald
Blenkinsop, Arthur
Carmichael, Neil


Archer, Peter
Boardman, H.
Carter-Jones, Lewis


Armstrong, Ernest
Booth, Albert
Coleman, Donald


Atkins, Ronald (Preston, N.)
Bowden, Rt. Hn. Herbert
Concannon, J. D.


Atkinson, Norman (Tottenham)
Boyden, James
Craddock, George (Bradford, S.)


Bagier, Gordon A. T.
Braddock, Mrs. E. M.
Crosland, Rt. Hn. Anthony


Barnett, Joel
Broughton, Dr. A. D. D.
Crossman, Rt. Hn. Richard


Beaney, Alan
Brown, Rt. Hn. George (Beiper)
Cullen, Mrs. Alice


Benn, Rt. Hn. Anthony Wedgwood
Brown, Hugh D. (G'gow, Provan)
Dalyell, Tam


Bennett, James (G'gow, Bridgeton)
Brown, R. W. (Shoreditch &amp; F'bury)
Darling, Rt. Hn. George


Bessell, Peter
Buchanan, Richard (G'gow, Sp'burn)
Davidson,James(Aberdeenshlre,W.)




Davies, Dr. Ernest (Stretford)
Hughes, Roy (Newport)
Page, Derek (King's Lynn)


Davies, G. Elfed (Rhondda, E.)
Hunter, Adam
Pannell, Rt. Hn. Charles


Davies, Ednyfed Hudson (Conway)
Jackson, Colin (B'h'se &amp; Spenb'gh)
Pardoe, John


Davies, Harold (Leek)
Jay, Rt. Hn. Douglas
Parker, John (Dagenham)


Davies, Ifor (Gower)
Jenkins, Hugh (Putney)
Pearson, Arthur (Pontypridd)


Davies, S. O. (Merthyr)
Johnston, Russell (Inverness)
Pentland, Norman


Dempsey, James
Jones, Dan (Burnley)
Perry, George H. (Nottingham, S.)


Diamond, Rt. Hn. John
Kelley, Richard
Prentice, Rt. Hn. R. E.


Dickens, James
Lewis, Arthur (W. Ham, N.)
Price, Thomas (Westhoughton)


Dobson, Ray
Lewis, Ron (Carlisle)
Price, William (Rugby)


Driberg, Tom
Lipton, Marcus
Probert, Arthur


Dunnett, Jack
Lomas, Kenneth
Rhodes, Geoffrey


Eadie, Alex
Loughlin, Charles
Robertson, John (Paisley)


Edwards, Robert (Bilston)
Lubbock, Eric
Robinson, W. 0. J. (Walth'stow, E.)


Edwards, William (Merioneth)
Lyons, Edward (Bradford, E.)
Rogers, George (Kensington, N.)


Ellis, John
McCann, John
Shaw, Arnold (llfOrd, S.)


Ennals, David
MacColl, James
Sheldon, Robert


Evans, Albert (Islington, S.W.)
MacDermot, Niall
Short, Rt. Hn. Edward (N'c'tle-u-Tyne)


Evans, loan L. (Birm'h'm, Yardley)
Macdonald, A. H.
Silkin, Rt. Hn. John (Deptford)


Faulds, Andrew
McGuire, Michael
Slater, Joseph


Finch, Harold
Mackie, John
Spriggs, Leslie


Fletcher, Raymond (Ilkeston)
Maclennan, Robert
Steel, David (Roxburgh)


Fletcher, Ted (Darlington)
MacMillan, Malcolm (Western Isles)
Steele, Thomas (Dunbartonshire, W.)


Foot, Michael (Ebbw Vale)
McMillan, Tom (Glasgow, C)
Swain, Thomas


Forrester, John
McNamara, J. Kevin
Swingler, Stephen


Fowler, Gerry
Mahon, Peter (Preston, S.)
Symonds, J. B.


Calpern, Sir Myer
Mapp, Charies
Thomas, George (Cardiff, W)


Gardner, Tony
Marquand, David
Thornton, Ernest


Garrett, W. E.
Mcllish, Robert
Thorpe, Rt. Hn. Jeremy


Ginsburg, David
Mendelson, J. J.
Tomney, Frank


Greenwood, Rt. Hn. Anthony
Millan, Bruce
Urwin, T. W.


Gregory, Arnold
Miller, Dr. M. S.
Varley, Eric G.


Grey, Charles (Durham)
Milne, Edward (Blyth)
Wainwright, Richard (Colne Valley)


Griffiths, David (Rotrier Valley)
Mitchell, R. C. (S'th'pton, Test)
Walden, Brian (All Saints)


Grimond, Rt. Hn. J.
Moonman, Eric
Wells, William (Walsall, N.)


Hamilton, William (Fife, W.)
Morgan, Elystan (Cardiganshire)
Williams, Alan (Swansea, W.)


Hannan, William
Morris, Alfred (Wythenshawe)
Williams, Mrs. Shirley (Hitchin)


Harper, Joseph
Morris, Charles R. (Openshaw)
Williams, W. T. (Warrington)


Harrison, Walter (Wakefield)
Moyle, Roland
Willis, George (Edinburgh, E.)


Hart, Mrs. Judith
Neal, Harold
Wilson, Rt. Hn. Harold (Huyton)


Hooson, Emlyn
Newens, Stan
Winterbottom, R. E,


Howarth, Harry (Wellingborough)
Ogden, Eric
Woodburn, Rt. Hn. A.


Howarth, Robert (Bolton, E.)
O'Malley, Brian
Woof, Robert


Howell, Denis (Small Heath)
Oswald, Thomas
Yates, Victor


Howie, W.
Owen, Dr. David (Plymouth, S'tn)



Huckfield, L.
Owen, Will (Morpeth)
TELLERS FOR THE NOES:


Hughes, Emrys (Ayrshire, S)
Padley, Walter
Mr. Alan Fitch and




Mr. Harry Gourlay.

Clause added to the Bill.

New Clause 20.—(EXTENT OF PART V.)

This Part of this Act shall not extend to Northern Ireland.—[Mr. Darling.]

Brought up, and read the First time.

Mr. Darling: I beg to move, That the Clause be read a Second time.
The new Clause will be substituted for Clause 117. In Clauses 117 and 118 there are references which state that the Clauses apply only to Great Britain. In Clause 119 there is no such provision, but, to be consistent throughout the Bill, we wish to add the words,
This Part of this Act shall not extend to Northern Ireland.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause No. 1.—(AMENDMENT OF SECTION 149(6) OF THE PRINCIPAL ACT.)

Section 149(6) of the principal Act shall be amended—

(a) by omitting the words 'to imprisonment for a term not exceeding six months or';
(b) by omitting the words 'two hundred pounds' and substituting therefor the words 'one hundred pounds';
(c) by inserting immediately after the last-mentioned Amendment the following new subsection—

'(6A) If any person being a director of a company wilfully fails to secure compliance with the provisions of subsection (1) of this section, he shall in respect of each offence be liable on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding £200';
(d) by omitting paragraph (b).—[Mr. Corfield.]

Brought up, and read the First time.

Mr. Speaker: We come to new Clause No. 1, with which we shall take the following new Clauses:
New Clause No. 6—(Increase in Penalties for Fraud.)—and new Clause No. 28—(Alteration of Penalties). At the same time, the House can also discuss the following Amendments: Nos. 24 to 27, 49 to 52, 65 to 70 and 109. I am prepared to allow a Division on New Clause No. 6 and on Amendment No. 109 if that is asked for.

6.45 p.m.

Sir J. Foster: I can initiate a debate on this subject shortly, drawing attention to the two principles involved. The principle involved in new Clause 1 is to take account of inflation and the seriousness of the offences covered by Section 149(6) of the Principal Act.

Mr. Speaker: Order. I am reminded that the name of the hon. and learned Member for Northwich (Sir J. Foster) is not appended to the new Clause. Will some other hon. Member move it formally?

Mr. Corfield: I beg to move, That the Clause be read a Second time.
I do not know whether that prevents me from speaking later in the debate.

Sir J. Foster: I thank you, Mr. Speaker, for getting me into the fold.
As I was saying when I was out of order, and not heard, the first principle is that we should amend those Sections of the principal Act in which the money amounts are not sufficient having regard to the erosion of inflation since 1948. The new Clause distinguishes between what may be purely negligent and what may be wilful. In new Clause No. 1 we seek to amend Section 149(6) of the principal Act. That Section deals with
a director of a company who fails to take all reasonable steps to secure compliance as respects any accounts laid before the company in general meeting with the provisions of this Section and with the other requirements of this Act …
He is liable on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding £200.
There is a provision at the end that
a person shall not be sentenced to imprisonment for any such offence unless, in the

opinion of the court dealing with the case. the offence was committed wilfully".
In the opinion of my right hon., hon. Friends and myself, it is a mistake in principle for the court to distinguish between what is negligent and what is wilful after the verdict of the jury on evidence which has been led. The director of the company is accused of not securing compliance with the Section of the Act. Evidence is given and he is found guilty. Then the court has to do another kind of inquiry, which is not according to evidence, and in which evidence is not necessarily led according to the rules of the trial as to whether an accused be negligent or wilful.
We consider this very undesirable from the point of view of protecting the liberty of the subject. If an offence is liable to lead to imprisonment, then the issue whether it has been wilful or negligent should be separated from the issue whether the accounts did or did not comply with the Section. In our submission the new Clause would be a very desirable improvement in the principal Act. It would avoid the court having to make a subsidiary inquiry after having heard the evidence whether the offence was committed.
Moreover, the Section includes the phrase
in the opinion of the court dealing with the case".
It is the opinion of the court and not a finding of the court as a result of evidence led, and that makes it difficult for the defence. Let us suppose that the defence wishes to argue that the offence was not committed. It leads evidence to show that, but at the same time it must have in the back of its mind, "Supposing we are wrong and supposing that the court finds that the offence has been committed: we must safeguard against the decision to show that it was negligent and not wilful." It makes it very difficult if the defence has to say, "I did not do it, but if I did it, it was negligent and not wilful." We sometimes get into the position in criminal cases of saying, "If I did it, my offence is less harmful than it seems". But it always puts the defence in great difficulty. It is different in civil cases. The judge in a civil case is used to alternatives. But great disadvantage arises in a criminal


case, especially as the gradations from very slight negligence or even none at all to wilfulness are very great.
New Clause No. 6, which is another of the Clauses grouped with this one, is on a slightly different basis. It deals with the penalty for fraud by officers of a company under Section 330 of the Companies Act. The reason for introducing that is that representations have been made that the penalty is not severe enough for very grave frauds. Probably I shall have the support of the hon. Member for Westhoughton (Mr. J. T. Price), who has spoken on many occasions in Committee about the need for more adequate penalties for people who fraudulently take advantage of those not able to protect themselves and has said that the penalties should be adequate for the offence.
In Section 330 the penalty is only two years' imprisonment and it is thought that in a very serious case it should be up to five years. One principle involved is that because of the effect of inflation, what was a very serious amount of £100 or £200 in different parts of the Act should be at least doubled. In the case of new Clause 6 the penalty of two years should be raised to five years. We consider that this is an improvement in the criminal law as applied by the Companie Act, namely, that it is made perfectly clear whether the prosecution is alleging that the offence was not wilful or that it was wilful. It would be undesirable for the prosecution to embark on a fishing prosecution and to say, "Let us see how it comes out in the evidence and see whether it was wilful or not". That would be contrary to the standards laid down in criminal prosecutions in this country and, I think, undesirable.

Mr. R. Gresham Cooke: I think that it would be a useful addition to put this Clause into the Bill and to make a differentiation between a wilful default and one which is not wilful. We are entering on a time when we will be putting on the Statute Book a huge new Act of Parliament. It consists of 120 Clauses, and seven Schedules. It is a Bill which we have taken nearly four months to consider in Committee in great detail. It will affect 400,000 companies,

some of which are the smallest family companies in the land.
Secretaries and directors of companies will have to fill in an enormous number of forms, not only giving returns of directors but other information which is required. I am convinced that there will be hundreds, if not thousands, of offences committed in the first year that the Act is in operation because these people will not know what is to be done. We are also entering a time in which quite large public companies will not have qualified secretaries. Anyone who has grown up with a company may be a secretary and may have no qualifications. Therefore, mistakes will be made. For a mistake which is only a slip, the penalty should be fairly nominal. On the other hand, there are fraudulent companies which make wilful defaults and hold up the making of returns sometimes for years. They should be severely punished.
I think the suggested Amendment is a useful one which I hope the Minister of State will accept because it would greatly improve this difficult and complicated Bill.

Mr. Darling: The hon. Member for Twickenham (Mr. Gresham Cooke) has suggested—I suppose one can only guess because this is hypothetical—that there may be thousands of technical offences when this Bill goes on to the Statute Book because directors of small companies and their secretaries will have to find their way through the new legislation. Of course we shall send out explanatory memoranda of one kind and another which will help. I assure the hon. Member that there will not be thousands of technical prosecutions.

Mr. Frederic Harris: I do not suppose that there will be a large number of technical prosecutions, but the shortage of advice is becoming very great. The burden of work is tremendous and companies will not be able to get the advice they need.

Mr. Darling: This is one of the issues we discussed frequently in Committee. It is one which we shall do our best to meet when the Bill goes on to the Statute Book.
The hon. and learned Member for Northwich (Sir J. Foster) rightly said that these Amendments are concerned with two issues. One to get the penalties right


for offences which are committed and where there are successful prosecutions, and in association with that to take note of the fact that the penalties which stand in the original 1948 Act and are carried forward into this Measure are, as a result of inflation, not such heavy penalties as they were in 1948. The second argument the hon. and learned Member put forward was on the question of whether there should be a distinction made between offences committed wilfully and those committed more or less by accident with no wilful intention.
In our discussions in Committee I gave are undertaking that we would look at the question of penalties, but I warned the Committee that if we were to have an adequate review of penalties throughout this legislation it would take some time and it might not be possible for us to put forward appropriate Amendments on Report. I can tell the House that the re view of penalties, in which of course the Horne Office and the Law Officers are involved, is now under way, but it is nowhere near ready enough for us to come forward with recommendations which could be incorporated in the Bill or Report. This will be a matter for the second Companies Bill which we intend to introduce during the life of this Parliament.
Therefore, although I gave an undertaking—which I have done my best to carry out—to have the penalties reviewed, we still think it would be desirable to stick to the penalties in the original Act an I which are carried forward to this Bill until the whole review is completed rather than to make ad hoc Amendments in regard to penalties in the Bill now before us.
On the question of whether an offence is committed wilfully or not, the hon. and learned Member rather let me down. When I saw that his name was not attached to the Amendments I thought that he was not in support of them and I conceived this to be something to my advantage. I hate to cross swords with the hon. and learned Member on points of law because I am no lawyer. I know very well why he has had to leave the Chamber, and I am not sorry in the circumstances. I am relying on my legal advice. I am told that it is desirable to keep the Bill as it is and not to accept this Amendment, for one or two good

reasons. The most important was referred to by the hon. and learned Member. It is that cases can come forward in present circumstances in which the Board of Trade is compelled to prosecute because of the offence and only during the course of the prosecution it transpires that something which the Board of Trade thought was not wilfully done is found to have been wilful.
7.0 p.m.
It is up to the courts in these circumstances, I understand, to decide what penalties ought to be imposed. We prefer to leave it to the discretion of the courts rather than place an obligation on the Board of Trade to say that a prosecution, if it transpires that it is for something wilfully done, should be a prosecution arranged in that way. On the advice that I have had, it seems desirable to stick to the Bill as it stands for another reason.
The hon. and learned Gentleman said that defence lawyers are put in a difficult position if they do not know whether it is the intention of the prosecution to say that the offence was wilful or not and the prosecution leaves it open. The legal advice I have is that defence lawyers will ask the prosecution whether it is the intention to go ahead on the ground that, in the view of the prosecution, the offence was wilfully committed. If the prosecution refuses to answer that inquiry and subsequently, as the trial goes on, it becomes clear to the defence that the offence was committed wilfully and that this was what the prosecution is getting at, it will ask for an adjournment. I understand that this is so in all such cases.

Mr. F. P. Crowder (Ruislip-Northwood): What is this proposition that the defence has to ask the prosecution how it intends to put its case before the court? If the prosecution comes with a case against a person in a court of law, it is for the prosecution to prove that case The defence does not have to go and ask how the prosecution intends to set about it. This is a ridiculous proposition of law.

Mr. Darling: All the legal advice we have in the Board of Trade, in that case, according to the hon. and learned Gentleman, is silly and stupid.

Mr. Crowder: The Board of Trade does not know about these things.

Mr. Darling: If the hon. and learned Gentleman is under the impression that we have no lawyers in the Board of Trade, he must think again. There may be something in this—I do not know. I have stated the advice I have been given.

Mr. Crowder: The right hon. Gentleman really cannot come here and say that he has been given information by Board of Trade lawyers and is passing it on to the House of Commons, asking it to listen to this sort of argument. It will not do.

Mr. Darling: The hon. and learned Gentleman is surprisingly ignorant of this matter. The Board of Trade has had a companies and insurance department under successive Governments with lawyers concerned only with matters affecting company and insurance law.

Mr. Crowder: Mr. Crowder rose—

Mr. Darling: No. I will not give way again. I am sure that the Board of Trade lawyers are far more experienced in this matter than the hon. and learned Gentleman. The advice they have given to me is the advice I am now giving to the House. I am no lawyer and I accept their advice, which is that wherever the Board of Trade prosecutes in these matters arrangements are made by the defence to find out precisely what the prosecution is doing.
We think that the present system of a single offence with a higher penalty, to be decided by the court—a higher penalty for a wilful commission being usual—is in the interests of justice, because in cases where the prosecution says that there has been a wilful commissioning of an offence the defence may well prove to the court in cross-examination that the defendant did not offend wilfully.
I do not wish, I repeat, to cross swords with the hon. and learned Member for Northwich on a matter of this kind. As I have said, when I saw that his name was not on the Amendment, I assumed that he was not supporting it. For the reasons I have given, we would prefer to leave the Bill as it is at this point and I repeat my undertaking that we shall go ahead as quickly as we can with the review of penalties so that we can, not only in the ad hoc cases raised in these Amendments but throughout the

companies and insurance legislation, make sure that penalties are uniform and in line with modern requirements.

Mr. Frederic Harris: I shall not detain the House long, but I want to make one or two comments on what was said by my hon. Friend the Member for Twickenham (Mr. Gresham Cooke). My concern about the Bill is the possibility of an innocent offence taking place. I support the idea behind new Clause 1 of trying to draw a distinction between wilful action and the appropriate penalties on the one hand and offences which are, in a way, innocent on the other hand.
I appreciate that the Minister of State has said that the Board of Trade would not embark on a witch-hunt of people making wrong returns, but from the business point of view I find that professional help available is getting less and less. They are becoming very overburdened, like taxation departments. Whilst all of us support the basic principles of the Bill, it is this type of worry which is very much in mind. Mention has been made that many firms are not able to use professional secretaries and have to call in professional firms to assist them in all these various returns. When one studies the detail of the Bill and all the returns which have been made, one must remind the Government that many offences will be innocently brought about and I am worried about this.
I am sorry that the Minister of State, who was trying to deal with the matter very fairly, did not seem to accept the principle lying behind what was said by my hon. and learned Friend the Member for Northwich (Sir J. Foster). I understood the case he was trying to put over but I hoped that the Government would accept the principle. He appeared to say that we should leave this over for the time being until we could deal with the revision of penalties in general. I agree, but not to the extent of lessening the distinction between wilful and non-wilful actions. Perhaps the President of the Board of Trade himself will be able to give us a little more comfort on this point.
From the business point of view, we are putting burdens on people which are most unfair. Much of the information required in the Bill could be omitted anyway, but that is beside the point now.


If we ask people to do things, we must see that they have a chance to carry them out. I am worried that we are going in for legislation directing people to do things that they have not a chance to do a ad which they do not fully understand.
I appeal to the right hon. Gentleman to see whether more consideration could be given to this aspect so that errors which may occur quite unexpectedly over a period of some years after the passing of the Bill will not result in serious consequences for those who have unwittingly brought them about.

Mr. J. T. Price: I want to make a short comment which I do not think was made in Committee, for it is appropriate now. We are dealing, in new Clause 1, with the question of offences and penalties for certain offences which may be either committed out of negligence or carelessness or out of wilfulness or criminal intention. These Clauses deal with actions which may be criminal. It has often occurred to me, on another plane apart from the one which hon. Members have been discussing, that when we give to a magistrate or a judge who is sitting on a case of this kind the alternative either of inflicting a penalty which is prescribed in a particular piece legislation of £X as a maximum or, in a case of wilfulness, the right to send the person convicted by a jury to prison, we are dealing with a very strange bag of penalties. I do not speak as a lawyer in this House, so the hon. and learned Member for Ruislip, Northwood (Mr. Crowder) must not try to trip me up on a legal quibble. If he does, I shall try to deal with it.

Mr. Crowder: The hon. Member is doing very well, if I may say so.

Mr. Price: Here we are dealing with a situation which applies to corporate bodies. This is company legislation. One of the paradoxes in the development of our modern society, with all its complexities, is that we speak as though we are dealing with individuals under the criminal law, whereas we may be dealing with corporate bodies. The Clause acid the proposed Amendments to it suggest that there should be penalties of £200 as a maximum in certain cases or, on conviction, imprisonment not ex-

ceeding a term of six months. We are dealing with something very difficult as it applies to a corporate body.
I put to the President of the Board of Trade that, as an undertaking has been given to look further at the whole question of penalties, the Government should address their minds to a different aspect from anything that has been mentioned up to now. When one inflicts a penalty of £200 or £500 upon a director or a general manager of some corporate body, under the principle of vicarious liability, once the fine has been inflicted and is paid out of the company's accounts it does not inflict any personal punishment on the person concerned.

Mr. Crowder: And is set against tax.

Mr. Price: I thank the hon. and learned Gentleman—and is set against tax. But if the person in the dock is convicted in such circumstances that the judge considers it proper to send him to prison, that is a very different form of punishment because it affects him personally. I have, I hope, smiled philosophically whenever I have read of cases affecting high officials, directors and general managers of large corporate bodies, not only in the realm of private finance in industry but in the realm of nationalised industries. What is the use of fining a high official of a nationalised industry £500, for example? If he has done something criminal, he ought to be dealt with in another way.
Every judge knows from his legal experience and his knowledge of what is happening that except in extreme circumstances he does not want to send anybody to prison because the gaols are bursting at the seams already. There is no more room to send people to prison. Very often in serious cases a humane judge will inflict the smallest penalty that is open to him because he is afraid of putting any more people in "jug" because there is nobody to look after them.
Some of our jurists and criminologists who consider these matters technically ought to look at the whole aspect of this matter. It is no use inflicting fines on people who act for corporate bodies. They might be very serious cases. I know, Mr. Speaker, that you are a great devotee of Gilbert and Sullivan operas, and I am


reminded of some lines in, I believe, "H.M.S. Pinafore" to this effect:
My object all sublime
I shall achieve in time—
To make the punishment fit the crime.

Hon. Members: It is "The Mikado".

Mr. Price: If it were not out of order, I would sing it.

Mr. Speaker: That would have given me great pleasure. What delights me is that everybody in the House corrected the hon. Gentleman and gave the right name of the opera.

Mr. Price: I am sorry. I made that illustrative point light-heartedly, although I am making a serious point that the whole question of penalties as affecting corporate bodies must be looked at in another light. I shall not pursue the point any further because we want to make progress with the Bill.

7.15 p.m.

Mr. Crowder: I am much concerned with this proposed new Clause because it seems to me to affect one of the basic principles of our criminal law. I am very surprised that when such a principle becomes involved we do not have the assistance of the Law Officers of the Crown. But, having regard to the work which the House of Commons has been doing in the last two days, I think this is quite understandable, so, although I express surprise, I do not advance criticism. However, when we are discussing matters which can affect the liberty of the subject, it seems singularly unfortunate that the business of the House should have been arranged in such a way that we have not got the benefit of the assistance and advice of those who should know best on this subject.
I confess that I was somewhat dismayed by the junior Minister, who has now left the Chamber, who, when I interrupted him on this point, merely said that he knew nothing about the law, let alone the criminal law, that they have got advisers in the Board of Trade who can tell them what to do. That, in terms, is what he said. He has now gone. He is not here to listen to me. I wish he were. It simply is not good enough if matters which affect the liberty of the subject are to be discussed in this House and all that the Minister of the

Crown can say is that he knows nothing about it, that he has had some advice from some lawyers in the Board of Trade and that it is good enough for the House. It is not good enough for the Opposition. I feel most strongly on these points.
What is meant by "lawful intention", indeed? Is it any different from what at the moment is still in existence in our criminal law as the main principle—the question of a guilty mind, mens rea, a guilty state of mind? Before a private person or a Government Department can have the temerity to bring a prosecution against a company or a private individual in this country, first of all a magistrates' court has to be satisfied that there is a case to answer and, secondly, on many occasions a jury has to be satisfied so that they can feel sure and certain of the person's guilt. If there be hesitation in their minds, that hesitation is sometimes described as being a reasonable doubt—not a conjured-up or whimsical doubt, but the sort of doubt which would move any one of us in our everyday domestic and business affairs. If such doubt be present, it must be resolved in favour of the person or company on trial, and he is entitled as of right, according to the law of England, to be acquitted. That is the dominant principle which runs through our criminal law.
Now we have the Board of Trade coming to the House of Commons and saying, through a junior Minister, that they do not really understand the proposition, that they have been told it is all right by some people whom they employ and who are called lawyers in their Department, and that therefore they are not prepared to discuss the matter further. That sort of thing simply will not do.
The burden of proof must always rest upon the prosecution. In this instance, in regard to which we are told by the junior Minister to whom I have referred that the defence will have to go along and ask the prosecution exactly what it means, can one honestly say that the burden of proof still remains where it should in a criminal matter?
These are enormously important matters. So far as I recall, I have never heard the word "wilful" used in any criminal case. What is meant by "wilful"? Where does the dividing line


lie between extreme negligence and wilfulness? If, for example, directors are criminally negligent or civilly negligent, haw near does that line come in relation to the word "wilful"? The last thing I wish to do is to detain the House on this matter, but these are questions of the greatest importance. I raise them with complete sincerity, and I ask the President o the Board of Trade to answer them.

Mr. Grant: I shall not follow my hon. and learned Friend the Member for Ruislip-Northwood (Mr. Crowder) in the delicate paths of the criminal law and the criminal mind. I wish to direct attention to new Clause No. 6, the simple effect of which is to increase the penalty o imprisonment for fraud under the principal Act from two years to five.
I want the House to understand that in this country, and in the City of London in particular, business people and others are deeply anxious about the outrageous frauds which are being perpetrated today, with enormous sums of money involved. Company fraud, particularly major company fraud, is now really big business in itself, and the loot obtained from big company frauds makes the loot obtained from a train robbery or bullion robbery look like peanuts.
The principal offence with which this penalty is concerned is covered by Section 3:30 of the principal Act, the most usual one being that
with intent to defraud the creditors of the company",
an officer of the company has
concealed or removed any part of the property of the company since, or within two months before, the date of any unsatisfied judgment or older for the payment of money obtained against the company.
That is one of the principal ways in which fraud is perpetrated, and, as I say, it is now very big business. A little time ago—perhaps my hon. and learned Friend the Member for Ruislip-Northwood will remember the case better than I do—there was a major company fraud for which the guilty parties were awarded fines running into six figures, but I am reliably informed that they accepted that punishment with glee because the proceeds of their fraud vastly exceeded the amount of the fines.
It is only right, when we are considering a Measure such as this, that we should express our determination to stamp out

the frauds which are a blot on our national business life and which are the subject of condemnation by all responsible business men. This occasion affords us an opportunity to raise the maximum prison sentence of two years for these disgraceful crimes, crimes involving sums far in excess of those for which far heavier sentences are given in robbery and larceny cases, to a maximum of five years' imprisonment. I commend new Clause No. 6 to the House on that ground.

Mr. Corfield: There are one or two issues here which should be separated. First, on new Clause No. 1, we are considering an attempt to bring the Companies Act, 1948, into line with the provisions which we suggested should be incorporated in the present Bill. Clauses 11 and 23 of the Bill contain provisions in regard to offences which are precisely the same as those covered by Sections 196 and 157 of the 1948 Act. They simply make it an offence to fail to carry out certain duties and prescribe certain maximum penalties, with the proviso that, if the offence is not wilful, the offender shall not be sent to prison.
The object of the exercise on this issue is to ensure that a proper distinction is drawn between the wilful offence and the one which is not. I shall not cross swords with my hon. and learned Friend the Member for Ruislip-Northwood (Mr. Crowder) about what "wilful" means, but I take the word from the existing Act, assuming that someone knows. As the penalty is considerably greater for committing the offence wilfully, the person should be charged with having wilfully done it and not be charged with a general offence so that he does not really know whether he is being charged with negligence or doing it with, perhaps, fraudulent intent.
Clause 27 of the Bill contains substantially the same provisions. There may be a definite element of fraud here. Again, therefore, if fraud is alleged, or if a man is liable to be convicted and sentenced for fraud or anything with an element of fraud in it, he should be charged with fraud and not left, perhaps quite honestly, believing that he is charged with a comparatively trivial offence of negligence.
The reason why we have brought for-word the new Clauses regarding these matters is that, in Committee, the Minister


of State said that his main difficulty in acceping our proposals then was that they would mean amending the principal Act. The new Clauses would do that. The only reason why new Clauses 1 and 28 are separate is that I had not immediately realised that there were several Sections in the 1948 Act with precisely the same provisions, so, for fear that the only new Clause when it came on the Notice Paper would be starred, I put down new Clause No. 1 and added No. 28 to it.
Emphasising what was said by my hon. Friend the Member for Harrow, Central (Mr. Grant), I point out that new Clause No. 6 is in an entirely different category. It deals with offences coming under Section 330 of the principal Act, almost exclusively matters involving fraud. It is essential to show that Parliament regards these matters as serious. Now that we have a string of penalties for relatively minor offences under the Bill all on much the same level as the penalty for downright fraud under the 1948 Act, this in itself is a reason for raising the penalties under that Act. I do not accept the proposition that we must wait for an overall review of penalties. We can get into an almost metaphysical argument if nothing can be done until a complete review of this branch of our law has been completed. We have before us now provisions creating new offences. There is every argument for dividing the negligent from the wilful and for making absolutely clear which type of offence is the subject of a charge. This is basic to the whole procedure of our criminal law. Moreover, there is every case for making clear that Parliament disapproves most strongly of fraud.
Amendment No. 109 raises a different' point. It is directed to Clause 46, under which the Board of Trade takes power to require a company with a misleading name to change the name. There is a right of appeal here, so I do not criticise it on other grounds, but, if the company does not take advantage of the right of appeal and refuses to change its name after being directed to do so, the penalty is £5 a day. If the misleading name was of great commercial value, as it might well be, that might be the main reason why it was adopted, and it could be cheap at the price of about £1,800 a year. That

sum might be a relatively good investment if the name were sufficiently valuable. We therefore felt that it was wise to have a higher maximum penalty, bearing in mind that it is only a maximum and that the courts will judge the circumstances in awarding any particular sum.
The Minister of State said that there will not be any frivolous prosecutions, but there could be, and there is no guarantee that there will not. There is a distinction between Clauses 11 and 23 on the one hand and Clause 27 on the other, which contains the safeguards, such as they are, that there shall be no prosecution without permission of either the Board of Trade or the Director of Public Prosecutions. That gives a certain assurance that frivolity will not normally be an element in the prosecution, but there is no such subsection in Clauses 11 and 23. This makes it much more important that we should get it absolutely clear that a person charged with an offence for which he can go to prison knows what he is charged with and the case he must meet. That is the object of the new Clauses and Amendments, and I hope that the President of the Board of Trade will accept them.

Mr. Jay: I note what the hon. Members for Gloucestershire, South (Mr. Corfield) and Harrow, Central (Mr. Grant) have said about the magnitude of the penalties. I would not contest that there is force in their argument, nor would I attempt to argue that the whole structure of penalties under this system of law is correct in all its ratios as between one offence and penalty and another. What makes me hesitate to alter the penalty with which we are now concerned is that we should have to examine carefully the repercussions on the penalties for other offences and their relationship to one another throughout at least the whole area of company law, which we are not covering in the Bill.
I do not contest the excellent general principles of criminal-law to which the hon. and learned Member for Ruislip-Northwood (Mr. Crowder) nailed the flag. I do not think that they are at issue in the debate. But he completely—although I am sure not wilfully—misrepresented my right hon. Friend the Minister of State, and he did not seem to focus entirely clearly on the main issue between us on the new Clause and the Amendments.
The main new Clause, new Clause 1, would create two separate offences, one wilful and the other without the inclusion of the word "wilful". We are not trying to argue that no distinction should be made between an offence that is wilful and one that is not. We did not invent the use of the word "wilful". It is in the new Clause put down by the Opposition and is already in the company law. I would not attempt to invent a new interpretation of it now.
The only issue between us is whether the distinction should be made by the creation of two offences, which is what the hon. Member for Gloucestershire, South advocates, or whether, as we advocate, discretion should be left to the courts to consider how far the offence was wilful and then impose correspondingly greater or less penalties. For all

the reasons which my right hon. Friend gave, and which I shall not repeat, it seems to me that it is wiser to leave that discretion to the court. Even the hon. and learned Gentleman would agree, with his much greater knowledge of the criminal law than I would lay claim to, that this would not be the only case in English law where a distinction would be left within the court's discretion. That is the point at issue between us. In my view it is reasonable to leave a discretion to the courts.

Mr. Crowder: I am grateful to the right hon. Gentleman for his most courteous reply to my observations.

Question put, That the Clause be read a Second time:—

The House divided: Ayes 100, Noes 174.

Division No. 454.]
AYES
[7.35 p.m.


Alison, Michael (Barkston Ash)
Harvie Anderson, Miss
Pike, Miss Mervyn


Awdry, Daniel
Hawkins, Paul
Pink, R. Bonner


Baker, W. H. K.
Hogg, Rt. Hn. Qulntin
Powell, Rt. Hn. J. Enoch


Besscll, Peter
Holland, Philip
Pym, Francis


Biggs-Davison, John
Hooson, Emlyn
Ridley, Hn. Nicholas


Birch, Rt. Hn. Nigel
Hornby, Richard
Royle, Anthony


Braine, Bernard
Hunt, John
Russell, Sir Ronald


Brewis, John
Iremonger, T. L.
Scott, Nicholas


Brinton, Sir Tatton
Jennings, J. c. (Burton)
Shaw, Michael (Sc'b'gh &amp; Whitby)


Bromley-Davenport, Lt. -Col. Sir Walter
Jopling, Michael
Stainton, Keith


Buck, Antony (Colchester)
Joseph, Rt. Hn. Sir Keith
Steel, David (Roxburgh)


Burden, F. A.
Kershaw, Anthony
Stodart, Anthony


Campbell, Gordon
Legge-Bourke, Sir Harry
Taylor, Sir Charles (Eastbourne)


Carlisle, Mark
Loveys, W. H.
Taylor, Frank (Moss Side)


Channon, H. P. G.
Lubbock, Eric
Temple, John M.


Cooper-Key, Sir Neill
McAdden, Sir Stephen
Thatcher, Mrs. Margaret


Curdle, John
MacArthur, Ian
Thorpe, Rt. Hn. Jeremy


Corfield, F. V.
McMaster, Stanley
van Straubenzee, W. R.


Craddock, Sir Beresford (Spelthorne)
Maude, Angus
Vaughan-Morgan, Rt. Hn. Sir John


Crowder, F. P.
Mills, Peter (Torrington)
Wainwright, Richard (Colne Valley)


Dance, James
Mitchell, David (Basingstoke)
Walker, Peter (Worcester)


Davidson, James (Aberdeenshire, W.)
Monro, Hector
Walters, Dennis


Dean, Paul (Somerset, N.)
More, Jasper
Ward, Dame Irene


Deedes, Rt. Hn. W. F. (Ashford)
Morgan, Geraint (Denbigh)
Webster, David


Doughty, Charles
Mott-Radclyffe, Sir Charles
Whitelaw, Rt. Hn. William


Elliott, R. W. (N'c'tle-upon-Tyne, N.)
Munro-Lucas-Tooth, Sir Hugh
Wills, Sir Gerald (Bridgwater)


Errington, Sir Eric
Nabarro, Sir Gerald
Wilson, Geoffrey (Truro)


Eyre, Reginald
Neave, Airey
Wolrige-Gordon, Patrick


Farr, John
Nott, John
Wylie, N. R.


Glover, Sir Douglas
Osborn, John (Hallam)
Younger, Hn. George


Gresham Cooke, R.
Page, Graham (Crosby)



Grimond, Rt. Hn. J.
Pardoe, John
TELLERS FOR THE AYES:


Gurden, Harold
Pearson, Sir Frank (Clitheroe)
Mr. Anthony Grant and


Hall-Davis, A. G. F.
Peel, John
Mr. Bernard Weatherill.


Harris, Frederic (Croydon, N.W.)
Percival, Ian



NOES


Abse, Leo
Bishop, E. S.
Buchanan, Richard (G'gow, Sp'burn)


Alliun, Frank (Salford, E.)
Blackburn, F.
Butler, Herbert (Hackney, C.)


Archer, Peter
Blenkinsop, Arthur
Cant, R. B.


Atkins, Ronald (Preston, N.)
Boardman, H.
Carmichael, Neil


Atkinson, Norman (Tottenham)
Booth, Albert
Carter-Jones, Lewis


Bagier, Gordon A. T.
Bowden, Rt. Hn. Herbert
Coleman, Donald


Barnett, Joel
Boyden, James
Concannon, J. D.


Beaney, Alan
Braddock, Mrs. E. M.
Craddock, George (Bradford, S.)


Benn, Rt. Hn. Anthony Wedgwood
Broughton, Dr. A. D. D.
Crosland, Rt. Hn. Anthony


Bennett, James (G'gow, Bridgeton)
Brown, Hugh D. (G'gow, Provan)
Crossman, Rt. Hn. Richard


Binns, John
Brown, R. W. (Shoreditch &amp; F'bury)
Cullen, Mrs. Alice




Dalyell, Tam
Hughes, Rt. Hn. Cledwyn (Anglesey)
Padley, Walter


Darling, Rt. Hn. Ceorge
Hughes, Emrys (Ayrshire, S.)
Page, Derek (King's Lynn)


Davidson, Arthur (Accrington)
Hughes, Roy (Newport)
Palmer, Arthur


Davies, Dr. Ernest (Stretford)
Hunter, Adam
Pannell, Rt. Hn. Charies


Davies, G. Eifed (Rhondda, E.)
Hynd, John
Parker, John (Dagenham)


Davies, Ednyfed Hudson (Conway)
Jackson, Colin (B'h'se &amp; Spenb'gh)
Pearson, Arthur (Pontypridd)


Davies, Harold (Leak)
Jay, Rt. Hn. Douglas
Pentland, Norman


Davies, S. O. (Merthyr)
Jenkins, Hugh (Putney)
Perry, George H. (Nottingham, S.)


Dempsey, James
Jones, Dan (Burnley)
Prentice, Rt. Hn. R. E.


Dewar, Donald
Kelley, Richard
Price, Thomas (Westhoughton)


Dickens, James
Lawson, George
Price, William (Rugby)


Dobson, Ray
Lewis, Arthur (W. Ham, N.)
Probert, Arthur


Doig, Peter
Lewis, Ron (Carlisle)
Rankin, John


Driberg, Tom
Lipton, Marcus
Rhodes, Geoffrey


Dunnett, Jack
Lomas, Kenneth
Robertson, John (Paisley)


Eadie, Alex
Loughlin, Charles
Robinson, W. 0. J. (Walth'stow, E.)


Edwards, Robert (Bilston)
Lyons, Edward (Bradford, E.)
Rogers, George (Kensington, N.)


Edwards, William (Merioneth)
McCann, John
Rowland, Christopher (Meriden)


Ellis, John
MacColl, James
Sheldon, Robert


Ennals, David
MacDermot, Niall
Short, Rt. Hn. Edward (N'c'tle-u-Tyne)


Evans, Albert (Islington, S.W.)
Macdonald, A. H.
Silkin, Rt. Hn. John (Deptford)


Evans, loan L. (Birm'h'm, Yardley)
McGuire, Michael
Silverman, Julius (Aston)


Faulds, Andrew
Maclennan, Robert
Slater, Joseph


Finch, Harold
MacMillan, Malcolm (Western Isles)
Small, William


Fitch, Alan (Wigan)
McMillan, Tom (Glasgow, C.)
Spriggs, Leslie


Fletcher, Raymond (Ilkeston)
McNamara, J. Kevin
Steele, Thomas (Dunbartonshire, W.)


Fletcher, Ted (Darlington)
Mahon, Peter (Preston, S.)
Swain, Thomas


Foot, Michael (Ebbw Vale)
Mapp, Charles
Swingler, Stephen


Forrester, John
Marquand, David
Symonda, J. B.


Fowler, Gerry
Mellish, Robert
Thomas, George (Cardiff, W)


Galpern, Sir Myer
Mendelson, J. J.
Thornton, Ernest


Garrett, W. E.
Millan, Bruce
Tomney, Frank


Gourlay, Harry
Miller, Dr. M. S.
Tuck, Raphael


Gregory, Arnold
Milne, Edward (Blyth)
Varley, Eric G.


Grey, Charles (Durham)
Mitchell, R. C. (S'th'pton, Test)
Walden, Brian (All Saints)


Hamilton, James (Bothwell)
Moonman, Eric
Whitlock, William


Hamilton, William (Fife, W.)
Morgan, Elystan (Cardiganshire)
Williams, Alan (Swansea, W.)


Hannan, William
Morris, Alfred (Wythenshawe)
Williams, Mrs. Shirley (Hitchin)


Harrison, Walter (Wakefield)
Morris, Charles R. (Openshaw)
Williams, W. T. (Warrington)


Hart, Mrs. Judith
Neal, Harold
Willis, George (Edinburgh, E.)


Hattersley, Roy
Newens, Stan
Wilson, Rt. Hn. Harold (Huyton)


Herbison, Rt. Hn. Margaret
Noel-Baker, Francis (Swindon)
Winterbottom, R. E.


Howarth, Harry (Wellingborough)
Noel-Baker, Rt. Hn. Philip (Derby, S.)
Woodburn, Rt. Hn. A.


Howarth, Robert (Bolton, E.)
Ogden, Eric
Woof, Robert


Howell, Denis (Small Heath)
O'Malley, Brian
Yates, Victor


Howie, W.
Oram, Albert E.



Hoy, James
Orme, Stanley
TELLERS FOR THE NOES:


Huckfield, L.
Owen, Dr. David (Plymouth, S'tn)
Mr. Joseph Harper and




Mr. Ernest Armstrong.

New Clause No. 2.—(EXCEPTIONS FROM DUTY TO FILE INFORMATION.)

In the case of companies whose securities have been neither quoted nor offered to the public and which are not subsidiaries of companies whose securities have been quoted or offered to the public such companies may withhold from the information filed with the Registrar of Companies—

(a) particulars of directors' emoluments as set out in section 6 and section 7 of this Act.
(b) particulars of salaries of employees as set out in section 8 of this Act.
(c) particulars of turnover as set out in section 17 of and Schedule 2 to this Act.
(d) particulars of the average number of employees and their wages as set out in section 18 of this Act.
(e) particulars of exports as set out in section 20 of this Act.—[Mr. Michael Shaw.]

Brought up, and read the First time.

7.45 p.m.

Mr. Michael Shaw: I beg to move, That the Clause be read a Second time.

Mr. Speaker: We now come to a large group of Amendments that are being taken with the new Clause. I shall not read the numbers of the Amendments, because I think that all who are interested have them.

Mr. Shaw: From everyone's point of view the principles involved in the group of Amendments that we are discussing with the new Clause are the most important in the Bill. They are related to the question of disclosure by companies both to shareholders and to the public at large. This has been a matter for discussion over many years, but I think it important to bear in mind, because too often we hear criticism of limited companies, that the privilege of limited liability has been given to the companies over the years now for more than 100 years in varying forms for two purposes.
First, it has been given to assist companies to grow larger and acquire resources from further and further afield, aid to encourage people to invest in them without having to put at risk the whole of their fortune. Secondly, the purpose has been to encourage the growth of industry. I think that over the years the formation of limited liability companies has proved of tremendous benefit to the well-being of the country. Indeed, it is fair to say that we could not today support the sophisticated commercial and industrial life of the country were it not for the existence of limited liability companies.
Part I of the Bill, although it is headed
Amendments of Law with respect to Companies generally",
contains Clauses the majority of which relate to disclosure and the consequences of the amending of the law in that respect. As I said, the obligation is twofold. It is first to the shareholders. I believe that there is no real difference of opinion between the two sides of the House about the need for more information being given to the shareholders about the companies in which they have invested.
That this additional information should be, given was fully recognised in the Jenkins Report of May, 1962. But differences of opinion have arisen between us as to how much information should be disclosed to the public through the accounts and directors' reports that have to be filed with the Registrar of Companies. This is the real difference of opinion, although there are certain maters of general information about which we shall argue later as to whether they will assist either shareholders or the general public.
I believe that in assessing the information which is required under this part of the Bill—we seek in our Amendments to take these factors into account—we must look first at how much information is required for it to be of benefit to the people concerned. I believe that there is a very real danger of over-burdening companies with the necessity to provide information. Indeed, if too much unnecessary information is asked for it can undo some of the good done by the provision of the necessary information

because there will be so much of it that it will be more difficult to see the really important information.
Secondly, we must look carefully not only at the rights of the shareholders and creditors as to information, but also at the rights of the company itself, and consider whether the information will do harm to the company if it is disclosed. We believe in the general conclusions of the Jenkins Committee. We believe that it is desirable for more information to be disclosed to shareholders. We believe that this information should be available to the public through the filing of accounts with the Registrar of Companies.
We also believe that the Jenkins Committee was right when it came to the conclusion in paragraph 61 of its Report that, in filing this information for the benefit of the public,
… some of the information now required by the Act (or to be required if our recommendations on accounts are accepted) is of much greater interest to shareholders and prospective shareholders than to creditors, and its omission from the copy of the accounts of small unquoted companies, required to be filed with the Registrar and therefore open to public inspection, might perhaps avoid some of the embarrassment without seriously reducing the value to creditors of the filed accounts.
That is fulfilled in the Committee's recommendation in paragraph 352, which says:
We recommend that companies whose securities have been neither quoted nor offered to the public and which are not subsidiaries of companies whose securities have been quoted or offered to the public should he permitted to withhold from accounts filed with the Registrar of Companies (but not from accounts circulated to their members and debenture holders)"—
and we are all agreed in that—
(i) the information now required by section 196 about the directors' emoluments; (ii) the details of turnover and rents receivable …
Rents are no longer an issue.
The main theme of our Amendments is that we believe that Jenkins was right to make the chief differential that between the quoted company and the unquoted company, because there is a real differential. In other parts of the Bill, in several places we come across the differential being made between the quoted and the unquoted company, and I am certain that this is the proper classification which


should be made when we are discussing disclosure to the public at large.

Mr. Joel Barnett: Will the hon. Gentleman make clear whether it is the Opposition's view that, in the case of all companies, the balance sheet should be disclosed?

Mr. Shaw: Certainly. If the hon. Gentleman reads the Amendments, as I am sure he has, he will see that we agree that the balance sheet should be disclosed. Indeed, we might have a long argument about whether anything else need be disclosed, but that is not strictly relevant to the Amendments which we are considering.
As the Jenkins Committee reported, the difficulty lies in the fact that exemptions should be made in respect of small unquoted companies. In our long and usually friendly deliberations in Committee upstairs, the Minister of State placed much more emphasis on the word "small". On the other hand, we have placed all our emphasis on the word "unquoted". There, I believe, we come to the real difference between us.
I accept that the smaller the unquoted company the more harsh are the provisions for disclosure likely to be. Let me make it clear that one of the Amendments removes Clause 48 from the Bill. That Clause was introduced in the House of Lords from our side, and it is now proposed by the Government that it should be removed. We are perfectly happy with Clause 48 as it stands, and we should be very ready to leave it there, but we have good reason to believe that the Government will have their way and will remove it. As a result, we have to seek alternatives.
In new Clause No. 2, we have tried to find an Amendment which, as it were, brings Jenkins up to date by including certain other matters which in our view unquoted companies should not be required to disclose to the public at large. We believe that when companies are unquoted and when they do not seek capital from the general public, but find it from their own resources or through personal borrowings at the bank, the only real need in presenting their accounts to the Registrar each year is that of satisfying the legitimate needs of creditors as to their solvency.
That is the main criterion, and we believe that the matters which we have enumerated in our Clause—the particulars of directors' emoluments, the particulars of salaries of employees, the particulars of turnover, the particulars of the average number of employees, and the particulars of exports—should be omitted from the accounts of unquoted companies. I could take up these points individually at length, but there are other Amendments which deal with these points, and perhaps it would be of benefit if we discussed the general principles of the disclosure of those matters when we come to them on later Amendments.
That is our first alternative. Having had an indication from the right hon. Gentleman in the course of or Committee proceedings as to what were his likely exceptions in place of Clause 48, we knew that he was moving along the lines of excluding information about directors' emoluments if the total amount of directors' remuneration fell below a certain figure. We knew also that if total turnover was under a certain figure that, too, would be excepted from being included in the accounts filed with the Registrar.
I am bound to say that we were in considerable expectancy throughout the first half of our deliberations upstairs. We had been led to expect much from the right hon. Gentleman. We were told that the only reason why the Jenkins Committee had included classification of unquoted companies was because the Committee had not been able to define what we have now come to call the family company. The right hon. Gentleman told us that, although Jenkins could not do it, the Government would do it and that we should wait and see when it came.
When he produced those two exceptions, we felt thoroughly deflated. I expressed concern on the very first occasion that I heard his suggestions of the limits; namely, directors' salaries of £5,000 and turnover of £20,000. I found it difficult to understand how anyone with a knowledge of companies could imagine that those two limitations were realistic in the light of present day circumstances.
I am glad to say that the right hon. Gentleman has had second thoughts, and I hope that our deliberations assisted him. We put down Amendments along those lines giving him various alternatives.


First, we gave him the alternative about directors' total remuneration which we knew was looked upon favourably by certain trade organisations, namely, where a single director was earning less than £5,000, two directors, £7,500, and more, £10,000. On turnover, we also gave him the alternative of increasing his thoughts to £50,000 and £100,000.
8.0 p.m.
I am glad that in both cases he has moved some way along the road to meet us and has plumped for the middle figure of £7,500 for directors' salaries and #.50,000 for turnover. Therefore, if the right hon. Gentleman gets his way, companies which are not holding companies or subsidiaries of other companies, provided that their directors remuneration does not exceed £7,500, will not be required to file the details of the directors' remuneration or the total remuneration. Similarly, if such a company has a turnover not exceeding 50,000 it will not have any obligation to file the details of turnover with the Registrar of Companies. However, all this information will still be required for the benefit of shareholders, and this we approve.
We have other Amendments to try and encourage the right hon. Gentleman. We had one very interesting Amendment upon which my hon. Friend the Member for Harrow, Central (Mr. Grant) will expound in due course. I should like to congratulate him on the tremendous amount of trouble and ingenuity to which he has obviously gone—something which no one else has been able to do—in preparing a classification of a family company. Were an Amendment on these lines to be accepted it would be of very material help to that type of company, and it is that type of company that we are anxious to help.
The remuneration of directors of a private family company is not a significant figure in itself. Time and time again when these family companies have their accounts prepared and finalised the last thing that is done is to examine the best tax advantage to be gained through the size of directors' remuneration. When tie profits have been arrived at the directors' remuneration is decided upon in the light of taxation levels and burdens and tie like. Directors' remuneration is not

only remuneration as such, but in these types of company it is very often a distribution of profits at the same time.
The matter of the turnover of the family company often applies in the case of single outlet retail shops. It makes these companies so vulnerable if the details of their turnover and sometimes the details of exports, as we explained in Committee, are disclosed, because their competitors are given very valuable information about the well being and size and profitability of their activity. That can be very embarrassing for that type of company. However, we shall hear more of that on further Amendments.
The one thing above all that disturbed us in Committee was the tendency running through the debate to shuffle off to a certain extent the reasons for giving all this information of these strictly commercial requirements on to an additional reason—the reason of Prices and Incomes policy. We believe that it is wrong to use the technique of a Companies Bill to provide statistical information for purposes other than the commercial needs of a company. There are many ways in which the Board of Trade can collect these statistics other than through the office of the Registrar of Companies.
This new reason that came at us on several occasions in our deliberations upstairs is a bad reason and we will continue to resist it throughout the passage of the Bill. We should view the requirements of disclosure both on the merits and the rights of outsiders to the company and also on the merits and rights of the company itself. It is, therefore, with complete conviction that I beg to move new Clause No. 2.

Mr. Gresham Cooke: I support what my hon. Friend has said. If the Minister of State will cast his mind back to the moment when he produced his formula for exclusion of small private companies at £20,000 a year turnover, he will recall that I at once said that was too small and that he would be criticised in the Press and by outside bodies. He was, in fact, taken to task by the Financial Times the next day, and then the professional bodies weighed in saying that £20,000 turnover—just about enough to keep a small sweetshop—was too small a limit.
I suggested that £100,000 was nearer the right figure and that he would be attaining the path of virtue if he went up to that amount. He has gone nearly halfway along the path of virtue—I am sorry that he has not gone the whole way—to exclude these family companies from what will be the very rigorous requirements of the Bill. The sum of £50,000 is not very large. There are a great many shops—sweetshops and grocers' shops—which have a turnover of £1,000 a week. One has only to stand in a bank and see the girl with the daily takings paying in £250 to realise that these little shops earn at least that amount of money, and sometimes considerably more. I think that £50,000 will prove too small a figure.
It is a bad thing to require disclosure of all these details from these small companies for two reasons. First, it makes them much more vulnerable to takeover from a big chain which has not disclosed the turnover of its own branch, but knows the turnover and details of the grocers' shop alongside it.
Secondly, I cannot help feeling that in small towns there will be busybodies—possibly the local Press—who will interest themselves in the turnover and salaries of small shops and make a habit perhaps of revealing these to the local public. That is not a good thing in the case of these family businesses. They should receive protection from public disclosure and this might fairly be achieved if the turnover figure was £100,000. I am sure that the onerous requirements of the Bill on these small businesses makes the risk of their being taken over by the big chains much greater because the turnover or the limit of protection is only £50,000 a year. I think that it should be higher.

Mr. A. G. F. Hall-Davis: As my hon. Friend the Member for Scarborough and Whitby (Mr. Michael Shaw) has said, coupled with the new Clause is a very wide group of Amendments and, because of the rules of order for this stage of the Bill, one must be careful not to omit to deal with the many matters which arise. I should like first to deal with the broader question of principle and then with some specific issues which arise from the

Government's policy which is embodied in some of the Amendments and which other Amendments seek to alter.
Two basic principles are involved in our approach to the issue of disclosure. The first is whether there should be a total abolition of any kind of exempt private company status and the second is whether disclosure is an absolute virtue in itself, or a means to an end. I believe that the views of the Standing Committee crystallised on this subject during our many discussions, which is not surprising, because we had 27 sittings in which to review the provisions of the Bill.
While the new Clause as drafted may not entirely meet the views of everyone who served on the Standing Committee, it would go a long way to meet the views of many people, and I suspect that there are not many hon. Members who would feel strongly if the Clause found its way into the Bill. It is dangerous to anticipate the views of hon. Members, but I would anticipate the views of the general public with considerably more confidence and say that if the new Clause were to be embodied in the Bill the general public would feel that the House had reached a sensible conclusion and had succeeded in balancing the various factors involved in deciding what was fair to the public in disclosure while avoiding the pitfall of prying into private affairs merely for the sake of idle curiosity.
In their proposals—and this is very important—the Government have recognised that the scale of operations of an undertaking is relevant to disclosure. This is a welcome flexibility. The Government have conceded that there should be exemptions in disclosure about directors' remuneration, which is covered by one of the Amendments, and about turnover when it is below certain levels.
The right hon. Gentleman may feel that it is a poor reward for this welcome flexibility on the part of the Government if, the Government having given way on a point of principle, I now use that as a ground, while pressing for an increased figure, to ask them to look again at the whole question of exempt categories, but it is important that they should do so, because they must recognise that the


nature of ownership is as relevant to some aspects of disclosure as is the scale of operations.
8.15 p.m.
After those 27 sittings and after a little pause away from the Bill in sunnier and pleasanter pastures, I went back to the Jenkins Report, as did my hon. Friend the Member for Scarborough and Whitby. I believe that the Jenkins Report put the balance right in paragraph 61 and that in general terms there is a case for wider disclosure from those which enjoy limited company status, but that, equally, there is an extremely strong case for not pressing that to the ultimate limits when disclosure is of no conceivable benefit to the general public as a whole.
I believe that the filing of the balance s feet and the profit figure is relevant to the interests of the general public, but I cannot believe that the information which would be elicited by the new Clause—directors' emoluments, total remuneration of employees' salaries, turnover, the numbers of exports and salaries of employees—is relevant to the protection of the general public when there is no public shareholding, in the general sense of the expression, in a company.
The House will be pleased to know that I have finished dealing with the issue of principle, but our labours would be made worth while if the Government recognised the considerable consensus of opinion and provided something which would give wide satisfaction to the general public.
The Minister will not be surprised if I return to the question of turnover, as did my hon. Friend the Member for Twickenham (Mr. Gresham Cooke). In Amendment No. 140 my hon. Friends and I are seeking to amend the figure of turnover limit for disclosure purposes to £l00,000. The Government introduced a welcome approach when they split up the different categories of disclosure and sought a way out of their problem by fixing different levels for it. This to me was a new approach, a sort of unravelling of the Gordian Knot, and it has struck me that it could be applied to other legislation and other very important matters with general advantage.
Even so, there must be some balance in the general size of operations which the Government regard as qualifying for

non-disclosure. For instance, a limit for the disclosure of the remuneration of directors at £7,500 would not be entirely unreasonable—the company concerned would have to be an exempt company with a turnover of up to £100,000 unless all the employees were directors—and nor would an exemption limit of 100 employees for wages. At any rate, it would lean towards being a sizeable company. I cannot emphasise too strongly that the figure of £50,000 is minute in relation to the general operations of commerce and industry today.
If such a modest figure as £100,000 is unacceptable to the Government, I am driven to the conclusion that there is some factor in their thinking, some underlying motive in their policies, which they have not disclosed to the House. I do not believe that they are deliberately trying to expose the small single-unit business to a savaging by large multiple concerns, because I do not think that the right hon. Gentleman would lend his personal support to such a step.
There is very real apprehension among small businesses, which is mainly the result of a fear of what will happen, and I can see no reason why the Government cannot accept the figure of £100,000 for turnover. It has been suggested that it will be necessary to amend this Bill very frequently. We have heard enough about the second Bill, and there will be sufficient in that without having to amend this one.
The general scale of business operations is increasing across the whole range of our economy. It is the Government's intention and policy to bring this about. Therefore, £100,000 will shrink in relation to the general size of activity in the years ahead. Secondly, a sadder point on which to end, the value of money is still falling. There has been a 10 per cent. increase in retail prices since the present Government came into office, so that £100,000 in 1964 would have shrunk to £90,000 now. It would be a bold man who would prophesy what is the political future. I hope that the Government will not be afraid to consider the principles involved in this new Clause and at least, in relation to the general turnover, will think once more and step up the figure to £100,000.

Mr. Barnett: I hope that hon. Members will forgive me for joining in this


debate although, unfortunately. I was not able to take part in the debates in Committee, because I was busy on the Finance Bill at the time. The point of my intervention in the speech of the hon. Member for Scarborough and Whitby (Mr. Michael Shaw) was to clarify the point about the attitude of the Official Opposition on the question of the disclosure of balance sheet. It seems that there has been, both in this House and Committee, and elsewhere, a certain fostering of fear in the minds of small family businesses that this Government are a sort of ogre doing dreadful things to small family companies. This is the general attitude of the Opposition and of the Liberal Party. I am surprised to note that in spite of its concern for the family companies the Liberal Bench is empty.
Some of the remarks made just now are an indication of something not far from a squalid political manoeuvre, implying that this Government somehow or other have something terrible in mind for the public concern. The hon. Member for Scarborough and Whitby must know that far more onerous for the small family company is the disclosure of the balance sheet. All the other matters are much less important than this to his next-door neighbour. Yet the hon. Gentleman accepted that this was the official Opposition view. I noted from the shaking of heads that some of his hon. Friends did not entirely agree. I cannot help feeling that it is a little shabby and dishonest to suggest that the Government are in some way hunting family businesses.
For one thing they know and we know that no small one-man business need suffer in any way. It either need not be a company or it can become unlimited under the terms of the Bill. If there is to be a privilege or limited liability, then there has to be, as has been said on many occasions, an obligation on that company.
As I said on Second Reading, that does not mean that I am in favour of information for information's sake. I am not. Even if there is an obligation, it may be that we do not need that obligation, in which case we should not have it. Some of the examples given in Committee, from my reading of the debates, showed a singular lack of knowledge of the real

effects of this disclosure and how it would discriminate against the small company. For example, we were told of the great dangers of a takeover for the small shopkeeper with the single shop. It has to be borne in mind that he has no need to sell anyway because he owns it 100 per cent. To think that the disclosure of turnover would of itself give information to multiple groups of stores which they did not already have or could not easily obtain, is a little naive.

Mr. Hall-Davis: When the hon. Gentleman refers to the risk of takeover, he is entirely misinterpreting the dangers to which the small business would be exposed. The danger that I foresee is that it would be destroyed profit-wise by pressure applied by a larger concern, without any suggestion of take-over, but by cut-price methods, and by a deliberate approach to customers. In this way a company that has disclosed a turnover in excess of what was expected by its competitors would be faced with very severe competition.

Mr. Barnett: This is stretching the imagination very much indeed. We were told by the hon. Member for Twickenham (Mr. Gresham Cooke) of the small shopkeeper going with his hundreds of £s every week to the bank. I can assure him that if he comes to my constituency the owners of small local grocery and sweet and tobacconist shops are not taking £500 a week, or £50,000 a year. They are taking very much less than that. To suggest for one moment that anyone interested in so harming that single shop as to make it vulnerable for a takeover, to suggest that a chain of stores would not be able to do it without this, is, I still suggest, a little naive.
There were some other odd reasons given in Committee. We were told that for tax purposes it would be harmful to revert to the partnership. This is, after all, what we heard throughout the 1965 Finance Bill debates and in 1966 and 1967, about the terrible penalties that we were inflicting upon the small family business by the close company provisions. Now we are told that it is a terrible hardship for them to revert to being a partnership. The type of small family business, which is a limited company, does not leave any profits in the company anyway, because, as was said, it is allocated as directors' salaries.

Mr. Stainton: The hon. Member has obviously overlooked the implications of the Capital Gains Tax and revaluation of assets on reversion of the company from one state to another.

Mr. Barnett: I was coming to that point. It was interesting to note in the Committee debates that the hon. Gentleman, a man with experience in these matters, was totally at variance with his colleagues. I take it that my point is taken on the question of Corporation Tax.

Mr. Corfield: Would the hon. Gentleman be good enough to give us a reference, because I have no recollection of mat point?

Mr. Barnett: If the hon. Member would care to look at a number of the speeches made he will see this. For example, in the speech of the hon. Member for St. Ives (Mr. Nott) he will see that reference was made to this question of the difficulties of reverting to partnership. I want to return to the question of capital gains and this great danger of enormous capital gains to the small family company if it reverts from being a company to a partnership. It is possible that the one-man business would have some Capital Gains Tax if it reverted in that way, although it still has the option to be an unlimited company under the provisions of this Bill, and it would not have any Capital Gains Tax liability.
Even if it did not do that and wanted to revert to being a partnership, we are not very far from April, 1965, the important date for the purposes of Capital Gains Tax. Bearing in mind that the only Capital Gains Tax would be on the difference of the value of particular fixed assets as between April 1965 and the date of conversion to partnership, I would be very surprised if the Capital Gains Tax penalties would be as enormous as has been suggested. We have been told about the dangers of Estate Duty if they revert to being a partnership. One thing which this indicates is how valuable it is to be a limited company. But my experience is that in respect of small family companies the Inland Revenue invariably insists on a net asset value for Estate Duty purposes.
8.30 p.m.
Those are some of the major reasons we have been given as to why there is

serious discrimination against family companies. I suggest that no such serious discrimination exists. However, there are nearly 400,000 private companies and I accept that in the great majority of cases there would be no advantage in having publication of anything, including the balance sheet, especially in the case of the husband and wife company which holds its annual general meeting in bed at night.

Mr. Michael Shaw: Is the auditor usually present?

Mr. Barnett: This particular auditor is not present. Perhaps the hon. Gentlement will enlighten us about the position in his own firm.
If we are to have the privilege of limited liability, there is some onus on the small company—and, indeed the Opposition accept this—to publish something, particularly the balance sheet, which is a rather important change in the provisions on company law. The hon. Member for Sudbury and Woodbridge (Mr. Stainton) made some of the most interesting contributions on this point in Committee. Clearly, he spoke from great experience and he differed widely from his colleagues about the advantage to a creditor of having this information.
It would be particularly valuable to a creditor to have it not simply because he will know 18 months later what the position of the company he was selling to was, but before he sells to it it is important to know the position and by this disclosure many small companies who abuse limited liability very considerably by trading when insolvent or nearly insolvent will not wish thereafter to trade in such a position. Disclosure would do no harm at all. In fact, it would be quite beneficial.
But that is an entirely different matter from disclosing all the information given in a profit and loss account. In the case of the great majority of the 400,000 small companies, such information would be of very little, if any, interest to anybody. But equally no harm would be done. However, I wish only information of value to be discolsed. It should not be disclosed simply for its own sake.
The problem is one of definition. It bothered many in Committee to try to find the best definition to give exemption for some disclosure. I would take the point


that the hon. Member for Morecambe and Lonsdale (Mr. Hall-Davis) made and I would go for turnover of about £100,000 a year. That would mean that information disclosed in the profit and loss account of a company with such a turnover would be of very little value to anybody.
Some misunderstanding may arise from the rather unfair criticism of hon. Members opposite about our views on small family companies. While I do not think that this is an ideal solution, I would exempt all information, not just parts of it, given in the profit and loss account of companies of the sort which come within the definition in new Clause No. 2 and which have a turnover of less than £100,000 a year. In one or two cases the information disclosed might be of some value, but in the great majority of cases it would alleviate very considerably the extent of the administrative problem without doing any harm from the point of view of economic or financial information which might otherwise be available to the companies. I suggest to my right hon. Friend that that way might give us the best of all worlds, and I hope that he will accept that sort of suggestion.

Mr. Airey Neave: I gather that the hon. Member for Heywood and Royton (Mr. Barnett) has come round about two-thirds to our point of view. The trouble is that the concessions that the right hon. Gentleman has made in Amendments Nos. 157 and 159, 291 and 297, raising the limit to £50,000 and the directors' salary limit, do not go to the root of the matter.
We are talking about why it is necessary for unquoted companies to disclose the items contained in new Clause No. 2 and there are wider problems in the other Amendments. I gather that the hon. Member for Heywood and Royton does not think that the items contained in new Clause No. 2 are necessary. I do not think that they are necessary in any way for an unquoted company, because there must be a basic principle of disclosure unless we are to have disclosure for disclosure's sake, which is not the wish of the House.
Shareholders have certain responsibilities and interests with regard to a company. In the case of an unquoted company, that does not apply. Is it

really necessary for the items in new Clause No. 2, therefore, to be sought out by other persons such as banks or trade creditors? We discussed this in Committee. That kind of information can be obtained locally—for example, in small country towns; I instance Abingdon, in my constituency—because many companies have shops of the type which we have been discussing. Is it really necessary for someone to have to go to Companies House to find these things out?
This is a practical matter for small companies. It has not been established that these items are essential in the public interest. The principle on which we should work is the Jenkins' principle of the interest of the shareholders. Unless we come down to a basic principle, we will get disclosure for other and far too wide reasons which have not been fully explained.
I do not know whether the Government have in mind other reasons for disclosure than they told us in Committee. There have been suggestions that the incomes policy is involved. Will the right hon. Gentleman confirm or deny that? So far, he has not established a case for making unquoted companies provide the kind of information which is specified in new Clause No. 2.
I would like the turnover limit to be raised to £100,000. My hon. Friend the Member for Morecambe and Lonsdale (Mr. Hall-Davis) was quite right about this and I hope that the Minister of State will concede the point. I think that the hon. Member for Heywood and Royton would agree with that, too. It would be a reasonable figure.
We are trying to legislate in the case of large companies for disclosure where it is absolutely necessary in the interests of shareholders, and, possibly, in wider interests, too, in the same way as for small companies. I do not think that that is possible, as I do not think that it is possible to legislate for quoted companies in the same way as for unquoted companies. There is confusion of thought behind all this and it could lead to great disadvantages to the small companies whose shares are not quoted.
For that reason, I hope that the Minister of State will give serious consideration especially to raising the turnover limit to £100,000.

Mr. Robert Sheldon: The hon. Member for Scarborough and Whitby (Mr. Michael Shaw) said that we would be bringing Jenkins up to date, but in his observations it seemed he was being rather selective about which part of Jenkins he wanted t o bring up to date. For myself, I accept the argument used by Jenkins on disclosure of turnover. It was not really an argument at all, but rather was a view expressed. This was in paragraph 351, where it was stated that
public disclosure by some small companies might be embarrassing to them".
This is no more than a view or an opinion.
In the period intervening between the publication of that Report and now there has come a need to bring that view—not an argument—up to date. I believe that the need for disclosure is much more widely understood and accepted today than it was when that Report was published.

Mr. Michael Shaw: Surely the hon. Member regards it as much more selective to quote a view and not to quote the actual recommendation of Jenkins?

Mr. Sheldon: I was quoting the reason for the recommendation, which is surely much more important. The recommendation stemmed from that view, and I was quoting that view, and thus quoting the source of the recommendation.
The hon. Member for Morecambe and Lansdale (Mr. Hall-Davis) wanted to make sure that we did not attempt to pry into the private affairs of companies. I myself do not think that a company is an extension of the individual. There comes a fundamental change at the moment when an individual starts employing others, and at the moment when the individual says that if his enterprise fails he will not be liable for the debts of that enterprise, and as soon as that transition is made, from the individual to the company, rather different rules then have to apply. Most important of all, one must accept that the affairs of that company, because of the great privileges it has secured in the process of transition from an individual to a company must be subject to much closer scrutiny than when it was an individual trading.
Naturally, on these matters one has to end up not with a real, solid argument

which hon. Members would like, but by making one's own judgment how far ahead of public opinion one can really go, and here we must accept that custom has some sort of rôle. But the most important reason for the extension of disclosure is not only the need for creditors to know what is going on, for people lending money to know what is going on, but for the public as a whole to know what is going on in the private field.
The coy and bashful attitudes which have been prevalent in the past may not be quite so prevalent in the future. We all know the position of civil servants and Members of Parliament. Industry, which previously operated largely in secret behind shuttered windows, is now becoming much more accessible, much more widely understood. I think that this is a move in the right direction.
It is hard to know at what speed one may proceed in such a way. I would prefer to go a little faster than my hon. Friend, but I think the move must be in this direction, must be towards greater disclosure, so that the public can be informed of what is going on, and be rightly informed. I believe that when this is known the time will come when it will be accepted much more readily than hon. Members suggest.

Mr. Barnett: Will my hon. Friend tell me what particular advantage it is to the public, in the case of a very small company, to know these sorts of things?

Mr. Sheldon: At present, many people have some very misleading impressions of what goes on in private industry and small firms—in particular, the dreams of high fortune which prompt so many people to take shops of one kind and another, and those dreams might well be dispelled to the benefit of those people who would be taking on those businesses, and others in a similar position.
I think that disclosure in itself is good, and that those who dispute it need to make their arguments much more convincingly than they have done so far.

8.45 p.m.

Mr. Burden: If the hon. Gentleman's argument is right that the public should know, surely the Government should apply it to every company and not if only there is a high turnover. Surely that would be ridiculous.

Mr. Sheldon: The hon. Gentleman has not understood what I was saying. What I had in mind was the figure of £25,000. This embodies the difference between myself and my hon. Friend the Member for Heywood and Royton, on the one side, and my right hon. Friend, on the other. I am somewhere even lower than both of them.

Mr. Grant: The House has enjoyed the Mr. Bones and Mr. Jones dialogue that we have listened to, as we always enjoy the contributions of the hon. Member for Ashton-under-Lyne (Mr. Sheldon) and the hon. Member for Heywood and Royton (Mr. Barnett). But they revealed two things, perhaps in a Freudian manner. The hon. Member for Heywood and Royton confirmed, if it ever needed confirming, the animosity towards small companies on the benches opposite, because he showed uncharacteristic venom against them.

Mr. Barnett: Would the hon. Gentleman quote anything I said which revealed venom against them?

Mr. Grant: No. It was rather the way in which the hon. Gentleman said it that was uncharacteristic. However, we must not attribute too much to each other. The disclosure point on which he diverged from the Minister of State was more interesting. I found myself much more in sympathy with him than with the hon. Member for Ashton-under-Lyne.
We agreed that, generally, there was need for more disclosure of the affairs of companies. There need be no doubt about that. I have argued it for many years, particularly in relation to some of the scandals which have taken place among large public companies. But disclosure is not an absolute virtue in itself, as the hon. Member for Ashton-under-Lyne seems to think. Some disclosure is good, but some of it is irrelevant and troublesome at best and at worst is sheer nosey-parkerism. I got the impression of nosey-parkerism from the hon. Member for Ashton-under-Lyne, who seems to want to know all about private companies just for the sake of knowing about them. What will he do with that information when he has it?

Mr. Sheldon: The point I was making was that those who want to create secrets and maintain them need to justify it.

Mr. Grant: On the contrary. I disagree. Those people who wish to pry into the affairs of private people should justify what they intend to do with the information.

Mr. Sheldon: But these are not private people.

Mr. Grant: I am reminded of the official of the War Office whom my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) has told the House about. At the height of the battle of Cassino, when my right hon. Friend was on the staff, he received a requisition from a War Office official asking him to supply a return of the number of members of the Women's Services under his command who were suffering from chilblains. He made up a fictitious figure, sent it back and never heard another word about it.
A lot of the information to be supplied by companies will be lost in dusty corners of Companies House. It is necessary to preserve a distinction between private and public companies. Letters and representations from my constituents and others show that there is more anxiety about small private companies on this matter than on anything else in the Bill. Indeed, the Government themselves were so uneasy about it that they invited us to make researches into ways out of the dilemma involving disclosure.
We were all to search for a new animal. I support the animal created by my hon. Friend the Member for Scarborough and Whitby (Mr. Michael Shaw), following Jenkins. I find attractions in this strange cross-breed animal produced by the hon. Member for Heywood and Royton and my hon. Friend the Member for Scarborough and Whitby. But in my researches I sought a much smaller animal—very small indeed and embodied in Amendment No. 1 and the Schedule that goes with it. It is so small that it is almost an insect. There is a very great number of these "animals". They are the small family companies which I have sought to define. The definition of this animal is a company whose directors and owners are the same people and none of the shares are held by nominees. As a concession to what went on in Committee, the members are limited in number to 10 and the assets do not exceed the liabilities by more than £50,000.
I am sure that there is a case to be made for preserving the old exemptions under the company law for a very small family business of this nature. There are only two possible reasons for disclosure of the balance sheet to the outside public. The hon. Member for Ashton-under-Lyne wanted to add a third because he was nosey. There are only two main reasons. One is to protect the creditors and the other is to protect the shareholders. This cannot apply to the shareholders, because in the kind of company I have defined the shareholders are members of the same family, or of a very small group. They will get the balance sheet anyway, by virtue of the law as it stands.
For creditors, there is more of a problem. I know that it is the anxiety of many people that perhaps the very small companies do cause a number of bad debts. I speak from experience, having often professionally collected some of those debts. This is greatly exaggerated. The amount of bad debts forms a small proportion in the major firms and businesses with whom I have dealt. Here, I am perhaps cocking a snook at my hon. Friend the Member far Sudbury and Woodbridge (Mr. Stainton). I do not believe that if one could go to Bush House and look up the balance sheet of the small company I have described, one would do so, because life is short and business is so harsh.

Mr. Burden: Is it not a fact that bad debts are often brought about by economic circumstances and that there is a growth of bad debts at the moment because of the circumstances inflicted on tie business community by the economic policy of the Government?

Mr. Grant: That is patent to us all, but I am grateful to my hon. Friend for reminding us of it.
If a great deal of benefit is to be gained in prudent business, most of the information can be obtained through inquiries from available sources. I do not believe twat there is a strong case on the ground a creditors and there is no case from the points of view I have described.
Unless we succeed in the new Clauses, as a result of the Bill a vast amount of energy will be expended by small companies, small men who ought to be getting

on with the job. This in itself is damaging. Much unnecessary information will be acquired. In spite of what was said by the hon. Member for Heywood and Royton, I believe that there is a danger to small companies from disclosure of the balance sheet. I am not suggesting that they will be swept away entirely or that giant corporations will take over every street-corner sweet shop. But on a lower level it can be damaging, as I know from my professional experience, as a result of the acquisition of information which would not otherwise be available.
I believe that the case for some form of exemption has been made overwhelmingly and I hope that my hon. Friends will carry at least two of our alternative proposals to Divisions.

Mr. Bernard Weatherill: I hope that I may be forgiven for intervening briefly in the debate. Like my hon. Friend the Member for Heywood and Royton (Mr. Barnett)—he is my hon. Friend; I often walk home with him at night—I was not a member of the Standing Committee. But the House knows that I have a particular interest in small companies, and I should like to make a brief contribution.
The hon. Member for Heywood and Royton said that small businessmen were unjustifiably fearful of the Government's attitude towards them. I think that they have every reason to be fearful. Does he suggest that the close company provisions of the 1965 Finance Act give small companies any confidence? As I have said, we often walk home together, and we discuss these matters, and I very much admire the way in which he seems to have information as to how to get round these difficulties. But the fact is that the Finance Act, 1965, was, I believe, intended to ensure in the long-term the break-up of the small family company.

Mr. Barnett: The hon. Member will surely recognise that small close companies—trading companies, as opposed to investment companies and finance companies—gain from the close company provisions and Corporation Tax under that Finance Act.

Mr. Weatherill: I ought to disclose an interest in this matter in that I run a close company, and I see nothing in the


close company provisions by which I gain anything at all. It seems to me that this Bill is intended further to accelerate the process of breaking up the small family businesses.
On Second Reading, much emphasis was placed on the amount of disclosure which American companies have to make without any apparent harm to themselves, but that information was not true. Indeed, it is nonsense. Very much more information is required from bigger quoted companies in America but small unquoted companies in America, I understand, need not file their accounts at all.
I ask the President of the Board of Trade or the Minister of State to tell me why he seeks to get private limited companies to supply all this information. I fully accept that a big quoted public company has an absolute duty to tell its participators all about its affairs. That is not in dispute. But what is very much a matter of dispute, and what new Clause No. 2 is about is the amount of disclosure which a small private limited company has to make under the Bill. I believe that there are a number of great dangers. For example, take turnover. Despite what the hon. Member said, this must be an obvious danger when a one-shop business has to disclose its turnover whereas its direct competitors, the branches of chain stores, need not disclose their individual turnovers. This will only forearm their competitors and will be a severe disadvantage to the one-shop business.
9.0 p.m.
As to salaries, this, too, will be a highly embarrassing matter. The Minister of State knows that nearly every thriving small business has a number of highly-skilled, specialised, valuable men, on its staff. If one is obliged to disclose theirturnover—I meant to say "salaries"; two nights and three days take their toll!—the competitors of such a firm, if they want to, are able to look at the information and try to tempt these key men away.
On the subject of exports, the point needs to be made that many companies are engaged in export trade in a hidden way. Any shop which sells to foreign visitors over the counter is carrying on

an export trade. Again, many firms that do not do a direct exporting business are performing a very useful function in keeping out imports. This point needs to be underlined.
Then, again, many companies make components which go into the major products which are exported. An obvious example is the motor car industry. Therefore, I do not see that this provision relating to the disclosure of exports will do anything to give security to the investors or creditors. It seems to me to be quite an irrelevant provision. Not only that; I think that it is potentially very harmful indeed.
I expect that a number of hon. Members have seen the splendid annual report by the Chairman of Butterworth & Co. Ltd., in which he says:
Thanks to the new Companies Act, U.S.A. publishers will now be enabled to learn far more about their U.K. competitors than they can learn about those in their own country. No wonder the present Government is acceptable to Washington.
Some years ago I was unwise enough to attend the annual general meeting of a small company in which my wife had been left some shares. I asked some questions and was put on the board that same evening. It did not take me long to find out exactly what had gone wrong. It was simply that something like 90 per cent. of that firm's turnover went to one very large customer, and it was not the firm that worked out the price; it was the customer who dictated it. I think that this is likely to happen in the case of these export figures. If a company is exporting to one single market, it is hound to forearm its foreign competitors.
Unless the House accepts this Clause this will be a further nail in the coffin of small businesses. I cannot see that to provide all this information will do any good at all. It will, on the other hand, do a very great deal of harm.
As I say, I did not have the good fortune to be appointed to the Standing Committee, so I merely wanted to make these few points tonight. What is really wrong with business and, indeed, with the country today, is the sheer weight of overheads. Speaking as the proprietor of a small company, I should like to stress the amount of work that we already do for the Government—P.A.Y.E., the collection


of Purchase Tax, annual returns, and the like.
No one minds filling in forms which will be useful, but, so far as I can see, the effect of the Bill, apart from the dangers which I have already outlined, will be simply to add further to the sheer weight of paper with which those of us who run these companies now have to concern ourselves.
I agree very much with what was said by my hon. Friend the Member for Harrow, Central (Mr. Grant). What we want to do is to get on with the job, and be left alone to get on with it. No one in a business objects to fair competition, and I take my stand firmly on the premise t rat, if a man cannot make a profit, he should not be in business. But the great danger of the Bill is that it will cause unfair competition in that it will arm our competitors.
For this reason, I hope that the House will accept the new Clause.

Mr. Burden: I also had the misfortune not to serve on the Standing Committee, though, when I learn how many sittings there were, my disappointment is somewhat muted.
The debate on this new Clause has been remarkable for one feature which seems to run through most of our debates nowadays, that is, the number of times hon. Members opposite disagree with their own Front Bench on various matters, sometimes on quite broad issues. It is not altogether surprising to find the hon. Members for Heywood and Royton (Mr Barnett) and for Ashtonunder-Lyne (Mr. Sheldon) differing to a considerable extent from their Front Bench on this issue. We are becoming accustomed to it, and I begin to wonder when, if ever, we shall see a united party opposite taking a unanimous view on any subject.
I hope that the Government will accept the new Clause. All of us who are in business know that directors of public companies are the custodians of the shareholders' business. It is not their business. It is the shareholders' business, and the directors run the company on behalf of the shareholders. I welcome any measure designed to provide slareholders with more information. In recent years, we have seen the need in

some areas for a tightening of the company law as it applies to public companies. I see nothing wrong in that. But I cannot see how the information required of private companies by the Government is either necessary or desirable.
Some hon. Gentlemen opposite say that it is necessary in order that creditors may know what is going on. Believe me, I like to know what is going on in any company to which my company supplies goods before we start supplying the goods. I see no benefit in being provided with their yearly accounts when there are already adequate services available to s how whether a company's credit rating is satisfactory. There are in existence companies specifically established to make inquiries and give information about the credit rating of any type of company. Moreover, those of us who are in business, when we wish to open trading with another company, ask for trade references, including bank references, and the information is available to us. We do not need all the rigmarole which the Board of Trade is now demanding. If the accounts are already on our books we watch how the companies make their payments, watch their position and regulate the credit we give accordingly.
Why is the sum of £50,000 proposed? It is very small. The hon. Member for Heywood and Royton said that in his constituency very few companies like tobacconists, newsagents, sweet shops and so on had a turnover of £50,000. But I know that in many parts of the country many such companies have this turnover, and some have more.
We want to get the whole question into perspective. I do not think that the information will be particularly helpful anyway, and I do not know what it is designed to provide in the case of private limited companies. But if the Government are adamant and determined to call for it I believe that a turnover of £100,000 is the minimum that they should set their sights at.
In any case, we must ask the right hon. Gentleman to tell us why the information is required. To what purpose will it be put? In what way will it assist the Board of Trade? How will it help the country? In what way will it


help other traders to obtain information that is not already available to them?
I ask the right hon. Gentleman, in assessing the value of the information, to recall the activities about three or four years ago of a very efficient company—Marks and Spencer. The directors called for every bit of paper circulated through the company, looked at it and asked themselves whether it provided information of any value. As a result, they abolished a great deal of the "bumph" that had been floating through the company, was costing a great deal of money, and, far from improving efficiency, was making for inefficiency.
I hope that before requesting information from companies and all sorts of people the right hon. Gentleman, the Board of Trade and Government Departments in general will in future first ask themselves what useful information will be provided, to what good purpose it can be put, and whether the cost of obtaining it will far outweigh the benefits.
If the right hon. Gentleman's and the Government's intention is carried out, and Bush House is flooded with great files of information, how many more civil servants will be required there to move the information around, in case somebody might want to see it at some time?

9.15 p.m.

Mr. Stainton: We have had a very full debate on this matter, and in Committee we had an even fuller discussion of the principles involved. As I incurred a certain amount of opprobrium—I might almost say "odium"—from my hon. Friends for the stand I took in support of the Government on the abolition of exempt companies, leaving open the question of where the dividing line should come in future, perhaps it is appropriate that I should say a word or two at this point.
I should especially like to record my extreme pleasure about the view expressed by my hon. Friend the Member for Scarborough and Whitby (Mr. Michael Shaw) and his joy that balance sheets and profit and loss accounts should now be filed by all companies. I do not recall that that sentiment prevailed at all notably in Committee, but I am very happy to hear it now.
The Government and anybody who looks at the problem are faced with a

very considerable dilemma. It is agreed that we must have more disclosure. The only problem—it is a substantial one is precisely where to draw the line. There are a number of parties involved in this situation—shareholders, creditors, employees—they have not been mentioned so far tonight, but they have a distinct interest in the matter—and the Government. I cannot see, certainly in principle, why the Government, if they can show good cause, should not glean policy-making statistics from information such as this. That is not to give them carte blanche to weigh down all proposed operations with futile questionnaires, but, in principle, I would accept and urge this step.
It is a red herring to concentrate too much on new Clause No. 2—the unquoted as opposed to the quoted company—because they will be let out by the net sum of the measure. There are a number of such industrial enterprises in the country, few admittedly. We could all quote names. For instance, there is Pilkington Glass. These exist. I will not extend the list because the position is known and accepted. Therefore, the differential between quoted and unquoted is highly misleading.
Looking through paragraphs (a) to (e) of new Clause No. 2 one can pinpoint the situation. With regard to the disclosure of directors' emoluments, there is an Amendment to exempt them up to a total of £7,500, and so that takes out the vast majority of small companies. The next paragraph concerns particulars of employees as set out in Clause 8. That starts at £10,000, and I should have thought that that would let out a subsantial number of companies about which my colleagues and other hon. Members appear to be concerned.
Then we have particulars of turnover as set out in Clause 17 and Schedule 2. To repeat what I observed in Committee, the profit and loss account is now to be filed apparently with the blessing of all sides of the House. Easily from that and from the balance sheet with the figures of debtors and creditors one can reasonably reduce the turnover figure without much doubt, and if one adds a little native wit and observation, I do not think that the band of statistical error will be very substantial.
The next paragraph concerns particulars of the average number of employees and their wages as set out in Clause 18. Numbers up to 100 do not apply. Here again, we let out a very substantial number.
Finally, we have particulars of exports as set out in Clause 20. The break point there is £50,000. There is a curiosity here in that one would have thought that there would be a theme running through the exemption limits. Relating £50,000 to 100 employees, one gets a gross output per annum of £500 per employee. If one relates it to the £7,500 directors' fees and the £10,000 break point for the disclosure of salaries of employees, one comes, I think, to the point that perhaps the £50,000 is too low. I would not go on record as saying that it ought to be £100,000, but there are a number of straws in the wind that the Government should heed.
I think that they are on the right lines, but I would not go so far as to say that they have it completely right. However, I concede that this is a complicated and tricky point, and perhaps one will have to wait and see how it evolves over the course of the next two or three years.
Finally, I wish to make a point in substantial contradiction of what I have been saying. I have been arguing so far in terms of the provisions in the abstract. I should like now to relate these provisions to the burden falling on companies. In his talk about working for the Government and collecting P.A.Y.E., my hon. Friend the Member for Croydon, North-East (Mr. Weatherill) sounded rather like a sub-postmaster rehearsing a speech for his association's annual conference, where one hears that kind of statement made. Nevertheless, the increased burden falling on companies at present is very substantial.
During the past two or three weeks, I have been looking at questionnaires from the Regional Planning Council in East Anglia, from "Little Neddies", from port authorities trying to determine the flow of traffic in exports and imports, and so on. All these make for a considerably added burden. I do not want to make loose political capital out of this. It is a fact of life.
I was talking to members of a firm of chartered accountants last week and asking them what they intend to do to advise their clients about the Companies Act when it passes into law. They are compiling a booklet, which has already reached 50 pages, as a child's guide to the Act telling their clients what to do. To say that this is a disastrous state of affairs would be to use dramatic and inappropriate language, but it is by no means a desirable state of affairs to add to the mountain of work on the shoulders of already overburdened companies. If the right hon. Gentleman wishes to retain the good will much less the friendship of the company world, he will have to hasten very slowly.

Mr. Darling: I was very pleased that the hon. Member for Sudbury and Woodbridge (Mr. Stainton) managed to get in at this last stage of a very interesting debate, because he helped to sustain me in Committee when we were discussing these problems, and I knew that he would not let me down now.
He is quite right. The real issue here is where one draws the line between the necessary disclosure of information which should be available for the benefit of shareholders, for potential shareholders, for investors and creditors, and for employees, and the unnecessary information which does not produce any good at all, as my hon. Friend the Member for Heywood and Royton (Mr. Barnett) pointed out. It might be completely useless.
Naturally we gave a good deal of thought to this and came to the conclusion that the best thing to do, seeing that we were all agreed about this closing information which was set out first of alt in the Jenkins Report and then in this Bill, was to draw the line and exempt for quite good reasons the very small companies. This immediately raises other problems such as the definition of a small company, but I will come to that in a moment.
The hon. Member for Gillingham (Mr. Burden) will be in extreme difficulty with some of his hon. Friends' new Clauses which will be coming up before long if he makes such a sweeping approach and says that none of the information which we are asking to be disclosed and which his hon. Friends are to ask to be disclosed—

Mr. Burden: Mr. Burden rose—

Mr. Darling: No. I want to get on—

Mr. Burden: That is misrepresentation.

Mr. Darling: No. It was a crack. We approach this by saying that it is the small company which should be exempt. The hon. Member for Scarborough and Whitby (Mr. Michael Shaw), who opened the debate with a very moderate and well-reasoned speech, picked up the point which I tried to make in Committee, which was to say, "Please do not refer to what Jenkins says about quoted and unquoted companies if you slip over the word 'small', which is the word underlined both in paragraph 61 and in paragraph 351". In paragraph 61,
… its omission from the copy of the accounts of small unquoted companies …",
and in paragraph 351,
… public disclosure by some small companies …".
The emphasis in the Jenkins Report is on "small" and the emphasis of our approach to the problem is on "small companies". Now we are in difficulties. The Cohen Committee was in difficulties and the Jenkins Committee was in difficulties. Both failed to define a small company for this purpose. It is suggested that instead of trying to find a suitable definition for a small company in order to put the de minimis rule in, we should take unquoted companies and allow all unquoted companies to get away with no disclosure. We cannot accept that, because it gets away from the idea of smallness. Many of these unquoted companies, as has been rightly pointed out, are large companies and, in our view, although the shareholders' interests are quite different, the interests of the creditors and the employees are just as strong and important in the case of the unquoted companies as in the case of the quoted companies.
I have a very difficult one on my shoulders at the moment involving an unquoted company and the row it is having with some of the employees it is about to sack as a result of a take-over deal. It would have been far better if we had had a lot more information in this case. I can assure hon. Members that information of this kind about unquoted companies is as important as in the case of quoted companies. We are

concerned with the question of size and I am confident that—

Mr. John H. Osborn: Will the Minister of State tell us what the value of this information would be if he got it? He is talking about quoted and unquoted companies, but what is the value of this information? Will he try to bring this out in his comments because there are many who will want to hear his reasons for opposing this Amendment?

Mr. Darling: We discussed this at tremendous length in Committee and it has been discussed in the various reports that we have had under consideration. If the hon. Member is not yet convinced that disclosure of information about turnover, directors' emoluments, and so on, is not essential to shareholders, potential shareholders, creditors and so on, at this late stage I cannot help him to get hold of those facts. However, I will do my best if he will allow me to continue.

Mr. Stainton: I am not certain why the hon. Gentleman has alluded to a case concerning redundancies. I think he might be trying to court popular sympathy with this allusion. He knows that I am not hostile to him on this issue, but he has made an unfair point. I cannot see how redundancies would be affected by disclosure of this kind of information.

Mr. Darling: On the question of compensation to employees.

Mr. Stainton: Legal liability.

9.30 p.m.

Mr. Darling: No. We want to go beyond that. I am sorry that I raised the matter. I am saying that the information being available to employees, as I am sure the hon. Member would agree, becomes important. Anyhow, we decided that the way to approach this problem was not to struggle any further with an attempt to find a definition for small companies which would be satisfactory, but to do what we have done in our Amendments.
This is to make no attempt at all to define "small company", but to set limits on each of the items of information, that is to say, the emoluments of directors, analysis and turnover of analysis, the number of employees and their wages, and exports. In each case we lay down a


limit below which that particular information need not be disclosed. Our Amendment says that if the total of directors' emoluments does not exceed £7,500, that information need not be disclosed and that the information about turnover need not be disclosed where turnover does not exceed £50,000. Of course, the two factors are not related. We have said that if the number of employees is fewer than 100, that information about their wages need not be disclosed.
The hon. Member for Sudbury and Woodbridge said that these things were not related if one wanted to find a common thread through them. In other words, as he pointed out, with 100 employees the maximum turnover figure would represent only £500 per employee, which would not pay his wages anyhow. These are convenient figures, and we believe that they are the right figures and we are not trying to find any relation among them.
The hon. Member for Twickenham (Mr. Gresham Cooke) said that many small firms would be vulnerable to take-over bids if this information were disclosed. He was referring to unquoted companies. As has been pointed out, if it is a very small company, there is no danger, because there will be one owner who will own 100 per cent. of the shares. I do not see any substance in that argument.
The hon. Member for Morecambe and Lonsdale (Mr. Hall-Davis) went on to say something far more important. He said that the nature of the ownership of a company was as important as its size if one was trying to deal with these problems as we are setting out to deal with them in the various Government Amendments. I agree with him entirely. This is one of the reasons why we want to see whether we can deal with many of the problems which have arisen in recent years, problems concerned not only with the disclosure of information, but with the administration of companies, problems raised in the Report of the Jenkins Committee.
We mentioned some of these in Standing Committee. We have to see whether we can find a new type of company whose structure and administration would solve same of these problems—a form of part-

nership, or whatever it might be. I believe that in this Bill the Government are on the right lines in seeking to limit the disclosure of information, but I hope that later we shall be able to turn again to the nature of the ownership of the company.
My hon. Friend the Member for Heywood and Royton and hon. Members opposite suggested that the turnover of £100,000 would be a more acceptable figure, but my hon. Friend was referring entirely to unquoted and not quoted companies. Generally speaking, hon. Members opposite have suggested that £100,000 turnover would be a far better figure for the cut-off.
I cannot accept this. I became increasingly confused as the hon. Member for Croydon, North-East (Mr. Weatherill) unfolded his views on this matter. It seemed that the kind of company about which he was talking was not a small family business but a flourishing medium-sized company. He is not here at present, but I have to say that he is far too modest. His speech raised the whole question of definition. It is a problem that we have run away from. We have solved the problem without trying to find a definition by setting forth a cut-off point in the way that we have. The hon. Member for Morecambe and Lonsdale also raised another very important point, which was that even if we accept a figure of £100,000 the way things have gone under succeeding Governments in the last 25 years or so means that it will be less than whatever figure we put into the Bill—about £50,000 less.
We have to look at this problem when we come to the second Companies Bill, when we shall deal more closely with administration and management of companies. I cannot accept the figure of £100,000, even from my hon. Friend the Member for Heywood and Royton in relation to unquoted companies. We must stick to the figures that we put forward in our Amendments. To my hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), I would say that I agree entirely with what he has said about the Jenkins Report. This Report started a general discussion on the whole subject, not only of disclosure but of the administration, structure and management of companies—the private sector of the economy.
In the general discussion which followed, some of the views and recommendations based on those views have come in for severe criticism. It would be quite wrong for us, or any Government, to be tied to the very letter, and perhaps the spirit in many cases of the Jenkins Report. We must move ahead and take account of the general discussion which that report started.
The hon. Member for Abingdon (Mr. Neave) wanted to know why we asked for that disclosure. This debate has answered the hon. Member. We would want disclosure, even from large unquoted companies, not in this case for the shareholders, but for creditors, employees and the general public. As the hon. Member for Sudbury and Woodbridge quite rightly pointed out, economic policy under any Government has to be based on facts. We have not had enough facts in the past. Many of the mistakes of successive Governments in economic policy have been due to the fact that there was a paucity of information upon which they could act. The more information we have the better.
I agree that we have an obligation here to make sure that requests for information over and above what can be disclosed out of companies' balance sheets and internal information should be asked for in the simplest and easiest form so that too great a burden is not placed upon the companies asked to provide the information. Therefore, my final word is that, much as I admire the initiative and enterprise of the firm of accountants to which the hon. Member referred, in preparing a handbook to the Companies Bill before it has got on to the Statute Book, it has anticipated what will be a far better, clearer and much shorter work which will come from official sources.

Mr. Corfield: I ought to say that I make no apologies, on behalf of myself, or my hon. Friends, for putting forward several alternatives to this problem. From the very moment that the right hon. Gentleman opened this matter with his Second Reading speech, there has been virtually an invitation from the Government to attempt to solve the difficult problem of defining a small company. The Government have given up the attempt, but that is no reason why the rest of us should be so fainthearted.
We have attempted to bring forward a number of Amendments—and we are concentrating mostly on new Clause No. 2 and Amendment No. 1, together with the new Schedule—which set out in some detail two alternative methods. Had the Government shown as much welcome to initiative as they appeared to show sympathy, I am sure that, even if one or other of the proposals was not acceptable, a combination could have been worked out which would have been much more satisfactroy than anything which the Government have produced.
As I said on Second Reading, basically the problem of the small family company is very largely the problem of the partnership. Many small family companies are virtually partnerships with limited liability. I do not deny that that brings benefits and privileges. If one accepts that, it is absurd to imagine that one should treat them in the same way as on treats the great bulk of companies, whether they be the giants or the medium companies. I would agree with the Minister of State that we should not take the Jenkins Report entirely as holy writ in these matters.
If there is a criticism of the Jenkins Committee in this respect, it is that it was composed very largely of people concerned mainly with large companies, and the information which it had before it was, almost inevitably, mainly concerned with large companies and the very small company was not given the full examination which perhaps was desirable and which certainly would have been useful for the problem with which we have been dealing.
We should remind ourselves that limited liability has given, and does give, benefits not merely to those people who enjoy the status but to the country and the public. There can be very little doubt that a very wide range, probably the great majority, of small businesses and medium and large businesses which have grown from small businesses would not have got off the ground if there had not been the safeguard to those who started them of feeling that, although they were prepared to take risks, they were not prepared to take the total risk of everything which they had. I am sure that this has been an enormous help, not only to our economy, but to the economy of every Western country. Therefore,


do not let us get it into our heads that this is purely something which gives benefit purely to those engaged in it.
The Minister and my hon. Friend the Member for Sudbury and Woodbridge (Mr. Swinton) mentioned employees. I admit that employees have rights and interests in these matters. But let us face the fact that the position of employees of a private individual who happens to have enough money to employ a fair number of them, of a partnership, of an unlimited company or of a small limited company such as my hon. Friend has in mind are precisely the same. If there is any advantage, it is with the employees of the small limited company who at least know that the liability is limited. But the employees of the individual have no more warning of an impending crash and they can be equally shattered. I do not believe that this is the right distinction to draw.
The arguments which can be put against the Government's approach are quite strong. I do not want to be too unwelcome, because at least they have moved a little, but I do not think that the concept of a ceiling either for directors' emoluments or for turnover can be regarded as satisfactory or as more than a temporary stop-gap. The great disadvantage of this approach is that it goes in the opposite way to that in which I should have thought most of us were anxious to go. Most people, and particularly the layman—I regard myself entirely as a layman in these matters—have
a good deal of suspicion of what I call the mushrooming group of companies—the sort of operations which welt on under the Rachman racket in housing, with every little operation being hived off into a different subsidiary company so that all the links are lost and one does not know who controls it.
9.45 p.m.
As soon as we start giving a privilege—and it is a privilege not to disclose up to a certain ceiling—on the basis of ceiling figures we virtually say to people that if they want to circumvent it they can form an exactly parallel company which would not be caught by the subsidiary company or associated company Clauses of the Bill. That is a defect in itself. It would be met by the proposals of my two hon. Friends.
In turning to the speeches of one or two hon. Members, particularly on the Government benches, I assure the hon. Member for Heywood and Royton (Mr. Barnett) that there is no need to foster any idea of fear of the Government as an ogre. I get the impression that it is already there. When the Lord Chancellor, in another place, states that practically all the tax frauds and evasions have arisen from the private company as the backbone of such operatons, it is hardly surprising when that is not backed up by evidence and is contrary to the impression which one gets from talking to people who are directly concerned with these matters.

Mr. Barnett: It is backed by all sorts of evidence and certainly by the fact that almost 100 per cent. of the back-duty cases for tax purposes concern private companies or individuals.

Mr. Corfield: I was saying that the Lord Chancellor himself did not support it. However that may be, I imagine that the hon. Member is endorsing the Lord Chancellor's remark to that effect concerning private companies.
The hon. Member said that it was stretching the imagination and being naive to suggest that a single shop competing with a branch of a large shop could possibly be harmed by the disclosures specified in the Bill without some form of limitation. It was the hon. Member who was being naive and stretching our imagination. It is a question, not of imagination, but of history.
I do not want to bore the House at this late hour, but I could quote many instances, admittedly mostly before the war, in which the most ruthless behaviour was carried on by larger firms because they happened to be able to get hold of information about smaller firms which became completely within their power, very much to the advantage of the larger ones. Perhaps over a coffee sometime I can tell the Minister of State of some of the ruthless methods which are used today, particularly by certain American firms in this country. I would be glad to tell him.
If the hon. Member for Heywood and Royton thinks that the publication of every bit of its information would not


in any circumstances harm a small company, I suggest that he is such an expert that he fulfils the old definition of somebody who knows more and more about less and less the further he goes on, because he is shutting his eyes to what goes on in the world.
The hon. Member for Ashton-under-Lyne (Mr. Sheldon) said that the onus to prove it is on those who think that disclosure for disclosure's sake is not a good thing. I would put the onus entirely the other way. As my hon. Friend the Member for Gillingham (Mr. Burden) remarked, one good reason for this is the enormous danger of cluttering up the place with paper and information which is not only of no great value, hut, what is much more important, will disguise the information that is of value and make it more difficult to sort out the wheat from the chaff. This is a real danger.
The hon. Member's suggestion that disclosure for disclosure's sake is good is something which I find repellent. The idea that everybody has the right to be a nosey-parker into everybody else's business, the idea that we base our incomes policy and everything else on envy, is

something which I find extremely unattractive. All I can say to him is that it is he who has to be a lot more convincing before my hon. Friends and I can go along with that philosophy. I would just remind him again that because of the value of limited liability to this country we as a House have duties to those companies, as well as those companies having duties.

I would ask the right hon. Gentleman to consider once more whether the proper approach to this should not be to continue to seek a definition, because, with due respect to him, he has not made a convincing case for not accepting the approach of my hon. Friends, particularly the approach of my hon. Friend the Member for Harrow, Central (Mr. Grant) in a Schedule which I think the House ought to congratulate him upon producing. It is an admirable piece of draftsmanship and an admirable concept—and the same applies to the other Amendments put down by my hon. Friends.

Question put, That the Clause be read a Second time:—

The House divided: Ayes 111, Noes 198.

Division No. 455.]
AYES
[9.49 p.m.


Alison, Michael (Barkston Ash)
Harvie Anderson, Miss
Pike, Miss Mervyn


Aster, John
Hawkins, Paul
Pink, R. Bonner


Awdry, Daniel
Heseltine, Michael
Powell, Rt. Hn. J. Enoch


Baker, w. H. K.
Hogg, Rt. Hn. Quintin
Pym, Francis


Birch, Rt. Hn. Nigel
Holland, Philip
Ridley, Hn. Nicholas


Boyd-Carpenter, Rt. Hn. John
Hornby, Richard
Ridsdale, Julian


Braine, Bernard
Hunt, John
Rossi, Hugh (Hornsey)


Brewis, John
Iremonger, T. L.
Royle, Anthony


Brinton, Sir Tatton
Jennings, J. C. (Burton)
Russell, Sir Ronald


Bromley-Davenport,Lt.-Col.Sir Waiter
Jopling, Michael
Scott, Nicholas


Bruce-Gardyne, J.
Joseph, Rt. Hn. Sir Keith
Shaw, Michael (Sc'b'gh &amp; Whitby)


Buck, Antony (Colchester)
Knight, Mrs. Jill
Stainton, Keith


Burden, F. A.
Lancaster, Col. C. G.
Stodart, Anthony


Campbell, Cordon
Legge-Bourke, Sir Harry
Taylor, Sir Charles (Eastbourne)


Carlisle, Mark
Loveye, W. H.
Taylor, Frank (Moss Side)


Cooper-Key, Sir Neill
McAdden, Sir Stephen
Temple, John M.


Corfield, F. V.
MacArthur, Ian
Thatcher, Mrs. Margaret


Craddock, Sir Beresford (Spelthorne)
McMaster, Stanley
Tilney, John


Crowder, F. P.
Maude, Angus
Van Straubenzee, w. R.


Dalkeith, Earl of
Mawby, Ray
Vaughan-Morgan, Rt. Hn. Sir John


Dance, James
Mills, Peter (Torrington)
Walker, Peter (Worcester)


Dean, Paul (Somerset, N.)
Monro, Hector
Walker-Smith, Rt. Hn. Sir Derek


Deedes, Rt. Hn. W. F. (Ashford)
Morgan, Ceraint (Denbigh)
Walters, Dennis


Dodds-Parker, Douglas
Mott-Radclyffe, Sir Charles
Ward, Dame Irene


Doughty, Charles
Munro-Lucas-Tooth, Sir Hugh
Webster, David


Elliott.R.W.(N'c'tle-upon-Tyne,N.)
Nabarro, Sir Gerald
Whitelaw, Rt. Hn. William


Errington, Sir Eric
Neave, Airey
Wills, Sir Gerald (Bridgwater)


Eyre, Reginald
Noble, Rt. Hn. Michael
Wilson, Geoffrey (Truro)


Farr, John
Nott, John
Wolrige-Gordon, Patrick


Glover, Sir Douglas
Orr-Ewing, Sir Ian
Wylie, N. R.


Gower, Raymond
Osborn, John (Hallam)
Younger, Hn. George


Grant, Anthony
Page, Graham (Crosby)



Gresham Cooke, R.
Pearson, Sir Frank (Clitheroe)
TELLERS FOR THE AYES:


Hall-Davis, A. G. F.
Peel, John
Mr. Jasper More and


Harris, Frederic (Croydon, N.W.)
Percival, Ian
Mr. Bernard Weatherill.




NOES


Abse, Leo
Fool, Michael (Ebbw Vale)
Murray, Albert


Allaun, Frank (Salford, E.)
Ford, Ben
Neal, Harold


Anderson, Donald
Forrester, John
Newens, Stan


Archer, Peter
Fowler, Gerry
Noel-Baker, Francis (Swindon)


Armstrong, Ernest
Galpern, Sir Myer
Noel-Baker,Rt.Hn.Philip(Derby,S.)


Atkins, Ronald (Preston, N.)
Garrett, W. E.
Ogden, Eric


Atkinson, Norman (ottenham)
Gourlay, Harry
O'Malley, Brian


Bagier, Gordon A. T.
Grey, Charles (Durham)
Oram, Albert E.


Barnett, Joel
Griffiths, David (Bother Valley)
Orme, Stanley


Beaney, Alan
Crimond, Rt. Hn. J.
Owen, Dr. David (Plymouth, S'tn)


Benn, Rt. Hn. Anthony Wedgwood
Hamilton, James (Bothwell)
Padley, Walter


Bernett, James (G'gow, Bridgeton)
Hamilton, William (Fife, W.)
page, Derek (King's Lynn)


Bessell, Peter
Hannan, William
Palmer, Arthur


Binns, John
Harper, Joseph
Pannell, Rt. Hn. Charles


Bishop, E. 8.
Hart, Mrs. Judith
Pardoe, John


Blackburn, F.
Hattersley, Roy
Parker, John (Dagenham)


Boardman, H.
Heffer, Eric S.
Pearson, Arthur (Pontypridd)


Booth, Albert
Hooson, Emlyn
pentland, Norman


Bowden, Rt. Hn. Herbert
Howarth, Harry (Wellingborough)
Perry, George H. (Nottingham, S.)


Boyden, James
Howarth, Robert (Bolton, E.)
Prentice, Rt. Hn. R. E.


Braddock, Mrs. E. M.
Howell, Denis (Small Heath)
Price, Thomas (Westhoughton)


Brooks, Edwin
Howie, W.
Price, William (Rugby)


Broughton, Dr. A. D. D.
Hoy, James
Probert, Arthur


Brown, Hugh D. (G'gow, Provan)
Hughes, Rt. Hn. Cledwyn (Anglesey)
Rankin, John


Brown, R. W. (Shoreditch &amp; F'bury)
Hughes, Emrys (Ayrshire, S.)
Rhodes, Geoffrey


Buchan, Norman
Hughes, Roy (Newport)
Robertson, John (Paisley)


Buchanan, Richard (G'gow, Sp'bu n)
Hunter, Adam
Robinson, W. O. J. (Walth'stow, E.)


Butler, Herbert (Hackney, C.)
Hynd, John
Rogers, George (Kensington, N.)


Carmichael, Neil
Jackson, Colin (B'h'se &amp; Spenb'gh)
Rose, Paul


Carter-Jones, Lewis
Jay, Rt. Hn. Douglas
Rowland, Christopher (Meriden)


Coleman, Donald
Jenkins, Hugh (Putney)
Shaw, Arnold (Ilford, S.)


Concannon, J. D.
Johnson, James (K'ston-on-Hull, w.)
Sheldon, Robert


Conlan, Bernard
Jones, Dan (Burnley)
Short, Rt.Hn.Edward(N'c'tle-u-Tyne)


Craddock, George (Bradford, S.)
Kelley, Richard
Short, Mrs. Renée(W'hampton,N.E.)


Crosland, Rt. Hn. Anthony
Lawson, George
Silkln, Rt. Hn. John (Deptford)


Crossman, Rt. Hn. Richard
Lewis, Arthur (W. Ham, N.)
Silverman, Julius (Aston)


Cullen, Mrs. Alice
Lewis, Ron (Carlisle)
Slater, Joseph


Dalyell, Tam
Lomas, Kenneth
Small, William


Darling, Rt. Hn. George
Loughlin, Charles
Spriggs, Leslie


Davidson, Arthur (Accrington)
Lubbook, Eric
Steel, David (Roxburgh)


Davidson, James(Aberdeenshire,w.)
Lyons, Edward (Bradford, E.)
Steele, Thomas (Dunbartonshire, w.)


Davies, Dr. Ernest (Stretford)
McBride, Neil
Swain, Thomas


Davies, G. Elfed (Rhondda, E.)
McCann, John
Swingler, Stephen


Davies, Ednyfed Hudson (Conway)
MacColl, James
Symonde, J. B.


Davies, Harold (Leek)
MacDermot, Niall
Thomas, George (Cardiff, W.)


Davies, Ifor (Gower)
Macdonald, A. H.
Thornton, Ernest


Davies, S. O. (Merthyr)
McGuire, Michael
Thorpe, Rt. Hn. Jeremy


Dempsey, James
Mackle, John
Tomney, Frank


Dewar, Donald
Maclennan, Robert
Urwin, T. W.


Dickens, James
MacMillan, Malcolm (Western isles)
Varley, Erle G.


Dobson, Ray
McMillan, Tom (Glasgow, C.)
WainWright, Edwin (Dearne Valley)


Doig, Peter
McNamara, J. Kevin
Walden, Brian (AN Saints)


Driberg, Tom
Mahon, Peter (Preston, 8.)
Watkins, Tudor (Brecon &amp; Radnor)


Dunnett, Jack
Mahon, Simon (Bootle)
Whitlock, William


Eadie, Alex
Mallalleu, E. L. (Brigg)
willams, Alan (Swansea, W.)


Edwards, Rt. Hn. Ness (Caerphilly)
Mapp, Charles
Williams, Mrs. Shirley (Hitchin)


Edwards, Robert (Bilston)
Marquand, David
Williams, W. T. (Warrington)


Edwards, William (Merioneth)
Mellish, Robert
Willis, George (Edinburgh, E.)


Ellis. John
Mendelson, J. J.
Wilson, Rt. Hn. Harold (Huyton)


Ennals, David
Millan, Bruce
Winstanley, Dr. M. P.


Evans, Albert (Islington, S.W.)
Miller, Dr. M. S.
Winterbottom, R. E.


Evans, loan L. (Blrm'h'm, Yardley)
Milne, Edward (Blyth)
Woodburn, Rt. Hn. A.


Faulds, Andrew
Mitchell, R. C. (S'th'pton, Test)
Woof, Robert


Finch, Harold
Morgan, Elystan (Cardiganshire)
Yates, Victor


Fitch, Alan (Wigan)
Morris, Alfred (Wythenshawe)



Fletcher, Raymond (Ilkeston)
Morris, Charles R. (Openshaw)
TELLERS FOR THE NOES


Fletcher, Ted (Darlington)
Moyle, Roland
Mr. Walter Harrison and




Mr. Harold Walker.

It being after Ten o'clock, further consideration of the Bill, as amended, stood adjourned.

BUSINESS OF THE HOUSE

Ordered,
That the Proceedings on the Companies Bill [Lords] may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Harold Walker.]

COMPANIES BILL [Lords]

As amended (in the Standing Committee), further considered.

New Clause No. 3.—(NOTIFICATION BY DIRECTOR OF COMPANY OF INTEREST IN SHARES OR DEBENTURES OF THAT COMPANY.)

(1) A director or officer of a company whose shares are quoted or offered on a recognised Stock Exchange, and which has one hundred or more members, shall notify the Board of Trade within ten days of the end of the calendar month in which such an event occurs (or in which he becomes aware of its occurrence) of any event in consequence of which he becomes, or ceases to be, interested in any shares or debentures of the company, giving the number of shares or debentures in which he has become or ceased to be interested, the date of the event, the nature of their interest under one or more of the following heads—

(a) direct beneficial ownership;
(b) direct but non-beneficial ownership;
(c) beneficial ownership through a holding company partnership, trust or other intermediary;
(d) non-beneficial ownership through a holding company, partnership, trust or other intermediary;
and of the transaction under one or more of the following heads—

(i) purchase or sale;
(ii) bequest or inheritance;
(iii) compensation for loss of office;
(iv) capital distribution;
(v) exercise of option rights;
(vi) gift;
(vii) rights issue;
(viii) scrip issue;
(ix) exchange or conversion;
(x) redemption.

(2) An obligation imposed on a director or officer by virtue of the foregoing subsection shall be taken not to be discharged in the absence of inclusion in the notice of a statement of the number of such shares or debentures held by the director following the event which gives rise to that notice.

(3) Information received by the Board of Trade under subsections (1) and (2) above shall he published by the Board of Trade in such form as it may consider suitable once in every calendar month.—[Mr. Bruce-Gardyne.]

Brought up, and read the First time.

Mr. Speaker: With this new Clause it is proposed that we take the Amendments Nos. 80, 81 and 83 to 97.

Mr. J. Bruce-Gardyne: I beg to move, That the Clause be read a Second time.
The purpose of this Clause is to argue the case for publication by the Board of Trade by what are commonly called insider share dealings; in other words, dealings by directors and others of public companies in the shares of the company of which they are directors and officers. I am grateful for the opportunity to discuss this Clause because since we discussed a similar Amendment in Committee some additional information has become available which, I think, affects our consideration of this argument.
I do not wish to argue anything which we do against the ownership by directors or officers of public companies of shares in those companies. On the contrary, it seems of great importance that directors and officers of public companies should have a stake in the equity of their companies because only in this way are they directly associated to their interests in the equity with the profitability of their companies at the point where it means most, namely, in the shareholders' interest.
Nevertheless, we have to balance the desirability of directors and officers of public companies having a stake in the equity of their companies against the danger that they will use their inside knowledge, their knowledge of forthcoming events which are liable to affect the value of the shares of the company to effect a bargain with a member of the public who is not so informed to the disadvantage of the latter. This is the balance I am anxious to strike in this new Clause. The Government propose in the Bill that companies should keep a register of insider share dealings and beneficial ownership of 10 per cent. or more of the equity and that this register should be available for inspection by members of the company at all times.
This is a great improvement of the position which pertains at the moment under the principal Act, by which the register of insider shareholdings is available only around the time of the annual general meeting. Nevertheless, I feel that the position could be further improved in respect of public companies. I emphasise that these proposals deal only with public companies, which I believe are in an entirely separate position in this respect from private companies, the shares of whch are not quoted and are not available to the general public through the Stock Exchange. On this account, I do not think that the present Bill goes far enough in dealing with public companies.
First, it is possible that by the time the. word gets around that insiders—directors or officers of public companies —may have been dealing on the basis of privileged knowledge—for instance, a take-over situation or at the time of a dramatic change in the trend of the company's fortunes, whether upwards or dcwnwards—and by the time that members of the company have got round to studying the register, which may be kept at the company's registered office but conceivably in some circumstances fairly inaccessible, the damage may already have been done.
Secondly, while the knowledge that a register of insider share dealings will be available at all times for members of public companies may be a deterrent to wrong doing, I do not think that it is nearly as powerful a deterrent as the knowledge that such information would be published and generally available to the financial Press and hence to the general body of shareholders in the public company. The mere fact of publication would be a very effective deterrent to misbehaviour by the small minority of insiders, of directors and officers in public companies, who might be inclined to misbehave.
It seems to me that a knowledge of how insiders—directors and officers of public companies—view the prospects of the company, in so far as it can be interpreted from the way in which they deal in the company's shares, would be of great interest and perhaps of great value to the general body of shareholders in

the company. I do not press the argument too far, but it is perhaps not unreasonable to suggest that the general body of public shareholders should have access to this information.
On the other hand, I accept that we have to be very careful not to overload public companies, or, indeed, the Board of Trade as the regulatory body, with additional regulatory or publication duties at a time when we are considering a Bill which will add considerably to the red tape surrounding the operations of companies—and add to it, in many cases, to my mind, in an entirely unnecessary and deleterious manner. It is, therefore, desirable to look into precisely what happens in the United States where, as the President of the Board of Trade is well aware, the Securities and Exchange Commission produces a regular monthly publication, a bulletin of insider share dealings. I have made some investigation to find out exactly how this operates.
What happens. in effect, is that directors and officers of leading public companies—I shall come in a moment to the range of companies covered—are required to pass details of any dealings in shares in their companies in which they may be directly or indirectly interested to the Securities and Exchange Commission within 10 days of the end of the month in which the dealing takes place, in the form, broadly speaking, which is set out in the Clause—in other words, under the various headings which are set out relating to the type of interest in the shareholding and the nature of the transaction.
I have found that this information is collected by a group of 13 employees of the Securities and Exchange Commission, receiving an average salary of 6,500 dollars a year. A salary of 6,500 dollars a year is not by any means a princely salary by American standards. In fact, it is a very small average salary indeed.

Mr. George Younger: It is microscopic.

Mr. Bruce-Gardyne: As my hon. Friend says, it is a microscopic salary.
It is clear that the group of 13 includes the office boy and the girl who makes the tea. All this is done by this group of 13. Therefore, it seems clear that this is not an onerous burden to place


upon the Board of Trade. Of course, in this country we do not have the Securities and Exchange Commission, and, although I think there are arguments either way, I think that, on balance, we are better without it. Therefore, if we are to place such a burden anywhere, we shall place the burden of publishing information of this nature upon the Board of Trade.
The other aspect that we have to consider is, if this would not be an excessive burden to place on the Board of Trade, whether it would be an excessive burden to place on the public companies concerned. All the information that I have been able to obtain from the United States of the way in which the S.E.C.'s operations work suggests that it has not been found to be an excessively onerous imposition on the major public companies in the United States. In fact, it seems to work automatically and very smoothly.
When we were discussing this subject in Committee I was exercised by the fact that, according to the information I then had, the Securities and Exchange Commission was collecting this information only from what are called the listed companies—that is, companies which are listed on the American Stock Exchanges which amount to about 2,500 companies, I understand, whereas there are 4,500 companies listed on the London Stock Exchange. I was, therefore, rather concerned that the volume of information which might result from a Clause of this nature coming into the Board of Trade might be unmanageable.
However, I have since learned that since 1964 in the United States—the President of the Board of Trade may possibly be able to confirm this—companies with 500 or more members and net assets in excess of I million dollars are required to pass this information regarding insider share dealings to the S.E.C., and this brings in an extra 3,000 companies into the net, making a total of about 5,500, which, of course, is appreciably more than the number of companies quoted on the London Stock Exchange.
10.15 p.m.
The end result of this collation of information is the official summary of security transactions and holdings, pub-

lished once a month by the Securities and Exchange Commission. The volume I have here is dated March, 1967, and runs to 81 pages. It is the end product of the work of those 13 officials of the S.E.C., each drawing an average salary of 6,500 dollars a year.
In case it might be thought that the Clause would impose an excessive additional burden on the Board of Trade, I have limited its application to those companies with 100 or more shareholders. To take the figure used in the United States of 500 or more shareholders would, in the context of United Kingdom company legislation, draw the limitation much too narrowly, and it seems to me that to set the limit at 100 or more shareholders is not unreasonable. I have been unable to ascertain exactly how many companies would thus be brought within the net. I put a Question to the Board of Trade, but the Minister could not give an answer, understandably, perhaps—I do not complain—and added that it would be excessively difficult to produce an answer. The best estimate I have is that about 3,500 or perhaps a few more public companies quoted on the London Stock Exchange would be brought within the net under the terms of the Clause.
Since we discussed the matter in Committee. I have widened the scope of the Clause to include officers as well as directors. Several hon. Members argued that, in the case of certain public companies —one thinks particularly of insurance companies, for instance—the officers may well be better informed, with more insider knowledge on which to base their dealings in the company's shares, than the directors are. This is a valid point. I have been careful not to define what I mean by officers, and I shall be interested to hear what the President of the Board of Trade regards as a suitable definition for this purpose. I recognise that it creates some difficulty. On the other hand, I suggest that, in a fair number of companies, it is a little inequitable to place a special burden on directors which is not placed on officers who may, in fact, be in a better position to make use of insider knowledge than the directors are.
In Committee, the Minister of State said, in effect, that, in principle, he was all for the proposition that insider share


dealings should be published, and published fairly quickly, but he did not see how this proposition would fit into the context of the Bill. He suggested that it should be held over so that we should see how the many changes introduced by the Bill would work—the keeping of a register of insider share dealings and beneficial ownership of 10 per cent. or more of the equity, and the availability of these registers at all times to members of the company—and we could then see whether they eliminated abuses arising from insider share dealings.
Then, if the Government were not satisfied by the way the provisions had worked out in practice, they would seriously consider inserting something on the lines of the new Clause in the next Companies Bill, which they regularly promise we shall have before the expiry of the present Parliament. I have always been very sceptical about the second Bill, and I still am.
In any case, if there is a good argument for the publication of insider share dealings it should be acted upon now. I cannot see why we should wait for the next Bill. If there is a case, as I believe there is, for having insider dealings promptly published; if it can be shown, as I believe it can, judging by American experience, that it can be done commodiously, expeditiously and not too expensively; I cannot see why we should wait for the next Bill simply because in the eyes of the Government it is supposed not to fit in with the philosophy of this Bill. I have never noticed that the Bill is particularly strong on philosophy, but even if it were I do not see that there is a good case for delaying acting on an argument if the argument itself is accepted.
I therefore commend the new Clause to the House. I believe that the rapid and frequent publication of insider dealings would help to eliminate some of the abuses which have arisen from time to time. Hon. Members on both sides will have them in mind. It would perhaps help to ensure, for instance, that in a takeover situation the directors and officers of a company were not motivated too much by considerations of possible gain, or loss of their own holdings, as opposed to the interest of the general body of shareholders. It would also add to the knowledge which the shareholders

in a public company have a right to obtain.
I believe that changes in the Bill along these lines would be very acceptable to the Stock Exchange. I am sure that they would be of great assistance to the financial Press, which I consider to be the most effective day-to-day guardian of the interests of the smaller shareholder. I therefore hope that on more mature reflection the President of the Board of Trade may give us a more forthcoming reply than the Minister of State could give in Committee.

Mr. Gresham Cooke: My hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) has made a characteristically honest and honourable attempt to control the efforts of the insiders, the "fly boys", who from time to time undoubtedly make money from their transactions. But I should not like it to be felt for a moment that contact with company directors leads one to make money.
I find exactly the opposite. When I ask directors of companies what is happening they say, "We are doing very badly but—we cannot understand it—our shares are going up", or one may ask a director about his company and he will say, "Frankly, we are doing very well, but we cannot understand why our shares are going down."Therefore, any advice that one gets from directors is of absolutely no interest or profit. However, I agree that one gets honest directors who say "We have just landed a contract with I.C.I. We think that we are doing very well, but it does not necessarily mean that the shares will go up."
I am sure that what my hon. Friend the Member for South Angus says is true, that there are officers of companies who make money on the side by these operations. Having said that, I confess that I think that my hon. Friend—I really regard him as a Right-wing Tory—is taking a very strong Socialist hammer to crack what may be a very small nut.

Mr. Bruce-Gardyne: I cannot allow my hon. Friend to say that I am using a strong Socialist hammer. What I am concerned to do is to ensure that in this question, as in so many others, the private enterprise system and the private enterprise company legislation operate to


the interests of the small shareholders. I should have thought that that was the very reverse of a Socialist hammer.

Mr. Gresham Cooke: The Clause certainly requires a great deal of information month by month from the directors and officers of companies, and to that extent it is something that we would want the President of the Board of Trade to bring forward from time to time. At the same time, I see my hon. Friend's point that these things are, or should be, required from honourable directors. The question that ought to be brought out is: is it practical for the London Stock Exchange to obtain this information and publish it month by month? In America, a great deal more information is given by companies every month to the New York Stock Exchange and the Securities Commission. I should have thought that we had not reached the stage at which it would be possible for the London Stock Exchange to give this information to the public or shareholders.

Mr. Bruce-Gardyne: I am not suggesting that it should.

Mr. Gresham Cooke: But, as I read the Clause, it is incumbent upon the directors and officers to supply the information month by month. Anyhow, I fully support the efforts of my hon. Friend to make this practical, but whether it is practical I take leave to doubt.

Mr. Michael Shaw: I congratulate my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) on his expertise and knowledge of the matter and also on the research that he has done and the hard work that has been converted into this Clause. It is fairly certain that he cannot be in any expectation that the President of the Board of Trade will meet him wholeheartedly this evening. None the less, even a good cause requires persistence, and it may be that as a result of his persistence in Committee and his efforts tonight, success may eventually be his. While travelling along a road one must always travel hopefully, and who knows when the moment will be when his hope will be fulfilled after all.
Clearly, my hon. Friend has a great number of points in favour of his suggestion. I support him 100 per cent. in

the view that it is still important—I know this is denigrated in many quarters —that directors should have a stake in their own company and everything towards that direction should be encouraged.
10.30 p.m.
None the less, having said that, I believe that directors have a special responsibility. After all, they are the custodians of the fortunes of the shareholders and the shareholders appoint them—mostly triennially—to look after the affairs of the company. By virtue of their office, they are in a position to gain information at a much earlier date than the general public.
So, when we are dealing with shares quoted on a public stock exchange, if a director suddenly begins to take an interest in purchasing shares or—and this may be the more serious of the two—in selling shares, it is probable that he has some special reason for doing so. If that special reason is not due to his personal circumstances, but is due to his knowledge of the working and fortunes of the company, this knowledge should either be shared with the public at large, or the public should be put on guard about the fact that the director is interesting himself in these transactions.
I recollect from my own experience a case of this sort when the company was not doing at all well and the directors persuaded the shareholders and the Board of Trade to agree to a postponement of the annual general meeting for six months. This meant that the accounts were months out of date when they were presented to the shareholders, and a considerable number of transactions had taken place in the shares by the time they were finally published. Clearly, this sort of situation ought to be stamped on. The shareholders should be put on guard as to the movements of shares in which directors have an interest.
I am a little more doubtful about the proposal for bringing officers into this category. I can see the force of the argument presented by my hon. Friend, but the objections which he himself raised about defining "officers" are major. By trying to go too far with the Amendment, he may well have made it difficult to accept, because it will make the whole proposal too complicated.
My hon. Friend the Member for Twickenham (Mr. Gresham Cooke) was far more cautious in his approval of my Inn. Friend's scheme. In principle, I am 100 per cent. in favour of the scheme aid I think eventually this will have to come to pass. My hon. Friend the Member for Twickenham painted himself in rather al innocent role in his discussions with his director friends. If they had expressed a view to him, which he believed, that the company was doing well bit the shares were going down, it would seem to be a clear indication to invest in that company.
Unfortunately, I never get this news until it is far too late. I find that the cream, as it were, has gone off the market. Of course, a similar situation faces all professional advisers to public companies and, indeed, to any company. As a chartered accountant, I know from experience how careful one must be in handling any shares of which one has inside knowledge, to make sure that one only deals with them at certain times of the year when one has only the same information as anyone else. Obviously, one does not deal with them when one has special information which is not generally available to the public.
This I believe to be right. I believe, also, that this restraint should he put on all public companies in the way my hon. Friend has suggested. Again I congratulate him on his efforts. I believe this to be one further step towards the success he desires to achieve, although it is doubtful whether tonight will be flu' night for the new Clause.

Mr. Stainton: I am sure that anyone who is interested in company shares will feel that insight in share dealings must be highlighted. The Government have gone a considerable way towards this by Clauses 20 to 29 of the Bill. This Clause seeks to do two things. The first is to extend in greater detail the provisions in Clause 27 about the type of transactions which should be reported, and the second is the extension to cover officers of a company. One might also include the private secretaries of the managing directors and their cousins. It is difficult to know where to draw the line.
The most important element in the Clause is the suggestion that the Board of Trade should receive alterations and

publish them along the lines of the Securities and Exchange Commission in the United States, and do so monthly. Since I have reservations about the implementation of the new Clause at this stage, I put the following case to the President of the Board of Trade.
Suppose that an enterprising firm of publishers avails itself of Clause 27(8) by requesting, at a fee of 2s., an extract of changes in directors' holdings—not, admittedly, in the amount of detail proposed in the new Clause, but in the very large detail proposed in Clause 27. Clause 29 deals with the mechanics of registration and notification of transfers. One need not be a shareholder to request this information. Suppose the firm of publishers then publishes the extract with fair promptitude, not perhaps within the month but certainly, I would think, within two months anyway.
We shall probably see a development like that and in these circumstances I would be content to let the matter rest where it is and see what happens in the next year or so.

Mr. Jay: We have had an interesting debate about this matter of disclosure of share dealings by insiders. There seems to be some difference of opinion opposite on how far we should go, in particular. as between the hon. Member for South Angus (Mr. Bruce-Gardyne) and the hon. Member for Twickenham (Mr. Gresham Cooke). Far be it from me to intervene between these holy men in this branch of doctrine.
Nevertheless, I find myself rather in sympathy with the hon. Member for Sudbury and Woodbridge (Mr. Stainton) in that probably we had better take one step forward in a fairly cautious and moderate fashion before we proceed further.
The hon. Member for South Angus has advanced an interesting and persuasive argument. I think that we are all agreed that we do not want to prevent directors of public companies, or even put obstacles in their way, from taking an interest in the shares of their own companies. Indeed, a very cogent argument could be advanced in favour of their identifying their interests with those of their shareholders. However, we are all agreed that, in so far as they do so, they should be prepared to make


known to the shareholders and the public generally what interest they hold.
Before becoming a member of the Government, when I did a certain amount of investment advice, I found a visible tendency on the Stock Exchange for the shares of companies to come down when they raised their dividends and for shares to go up when dividends were lowered, and this led one to believe that there were people who knew in advance what was to happen and who took the opportunity to make profits out of it. I was not sure whether the hon. Member for Twickenham was speaking as an insider or an outsider.

Mr. Gresham Cooke: Merely as one who took an impartial view.

Mr. Jay: I am sure that the hon. Gentleman took an impartial view, but I have never regarded him as an outsider. Nevertheless, this phenomenon shows there is a strong case for providing that those with this inside knowledge should at least declare to the shareholders of the company and to the public what their interest is.
I agree with the hon. Member for Sudbury and Woodbridge that the Bill takes a considerable step in this direction. Clause 27 requires a director to notify his company, that is to say, the shareholders of the company, of his interest in its shares and debentures, or his interest in the shares and debentures of other companies in the group. This means that it will be a duty on him to declare his interest and thereafter to declare any sales or purchases of shares of this kind, and I take it that we are all agreed about that and regard it as a considerable step forward.
What the hon. Member for South Angus is proposing is that, in addition to this, the director of a company whose shares are quoted or offered on a stock exchange which has at least 100 members should give information to the Board of Trade and not just the members of the company about his interest in the company's shares or debentures and that the Board of Trade should publish this information once a month. I recognise that this is modelled on the practice followed in the United States by the Security and Exchange Commission and

that an argument in principle can be advanced in favour of it.
On the other hand, we must take account of the fact that the Jenkins Committee, to which we are all paying attention and allegiance in these debates, examined American law and practice in this respect and did not come down in favour of recommending that we should immediately at this stage follow the present United States requirements.

Mr. Stainton: Would not the right hon. Gentleman agree that under Clause 29(8) any member of the company or other person may require details of these changes, which situation leaves it wide open for any interested party to publish them and which would achieve this end in the new Clause?

Mr. Jay: That is so. It is not quite equivalent to the United States practice, but it goes a considerable way in that direction. We have considered this again, partly in response to the arguments of hon. Members in Committee and partly on account of the hon. Gentleman's Amendment. If we were to do that, it would be necessary to hold consultations with outside bodies—for instance, the Stock Exchange—which could hardly be done in time before the Bill reached the Statute Book. Most of us do not wish to delay too long the time when the Bill reaches the Statute Book.
10.45 p.m.
Therefore, it would be wiser to make the advance which we are making in the Bill, but, in view of the Jenkins Report and the experience in this country generally, not to proceed further until there has been time for more extensive consultations. I recognise that the hon. Member for South Angus is anxious to move ahead at a great rate and is a radical reformer in this respect. It shows what a moderate, cautious, and modest policy we are pusuing in that we are being rather less impetuous than the hon. Gentleman would wish us to be. Our motto is: "One step enough for me amid the encircling gloom "—the encircling gloom of the companies legislation.
Nevertheless, this is a major step forward, and most of us would favour directors of public companies taking an interest in the shares of their companies,


but that there should be increased publicity for the purchase and sales of the shares and debentures of those companies.

Mr. Bruce-Gardyne: The President of the Board of Trade has at last produced what seemed to me a convincing argument. He said, "One step for me amid the encircling gloom". There is so much encircling gloom round the Government's economic policies that we are all hard put to it to take any steps at all. This is the first argument for caution which I have heard on Report or in Committee; but it is an impressive one.
We all seem to use the Jenkins Report to suit our own purposes. It was said at the time of the discussions about the European Free Trade Area that the Americans' great slogan was " G.A.T.T. mit uns". Both on the Government side and on the Opposition side, we are inclined to say "Jenkins mit uns" when it suits us. But the Government are inclined to forget Jenkins when it does not suit them. Therefore, we are bound to view this argument with a certain amount of suspicion.
May I correct one misunderstanding, which is probably my fault, which lingers in the mind of my hon. Friend the Member for Twickenham (Mr. Gresham Cooke). I was not suggesting in the new Clause, and I have never suggested, that the Stock Exchange Council should collect or publish this information, be-ca use I do not think that the Council, not being a statutory body, could be expected to do it or could do it. The suggestion is that the Board of Trade should do it.
A number of hon. Members have criticised the inclusion of officers in the requirements of the new Clause. I was disappointed that the President of the Board of Trade did not deal with this point, which is not unimportant, as to whether officers should be included as well as directors in any requirements regarding publication of their share dealings, and, if so, which officers.
My hon. Friend the Member for Sudbury and Woodbridge (Mr. Stainton) pointed out that it would be difficult to know where to draw the line. I accept that, but it is interesting to note that the Security and Exchange Commission seems to have found it possible to arrive at a

point at which it is reasonable to draw the line. I would not have thought that it would have been straining the ingenuity of the Board of Trade too far. However, we do not know whether it would be because the President of the Board of Trade did not tell us.
The most important suggestion to emerge from the debate is the one made by my hon. Friend the Member for Sudbury and Woodbridge that it would be perfectly open to an enterprising publisher to make use of Clause 29(8) and to collate and publish the information which will be available in future in the register, of insider share dealings and beneficial ownership of 10 per cent. or more of the equity of public companies. He was arguing that this would achieve the same purpose as the new Clause, although somewhat more belatedly and at one remove.
In principle, I can see no objection to that argument, although I am bound to confess that I am a bit doubtful about the likelihood of this actually happening. I do not imagine that there would be an enormous or profitable sale for such a publication. I do not know what the sale of the Official Summary in the United States is, but I gather that it is a rather-expensive publication to which to subscribe. I doubt whether a similar publication in this country would receive a very wide circulation, or whether it would be a profitable one. I may be wrong.

Mr. Gresham Cooke: What would my hon. Friend do about the aunt of the managing director, and the private secretary? Are they to appear in the publication about which he is talking?

Mr. Bruce-Gardyne: I think that the aunt is covered. At least she could be. The President of the Board of Trade shakes his head, but I would not like to enter into an argument with my hon. Friend about it. I am not sure that it would be in order. As regards the private secretary, I was hoping that we would have some sort of explanation of the Board of Trade's thinking along the lines of distinguishing officers and those who would be required to disclose their share dealings. The Board of Trade should direct its mind to this.
I found the suggestion of my hon. Friend the Member for Sudbury and Woodbridge attractive. There is a valid case for seeing whether some enterprising


publisher will get round to publishing some sort of regular summary of insider share dealings from the information which will be available in the register kept at company offices. I am sceptical whether this will happen. If it does not there will be a strong case for introducing something along the lines of the new Clause.
In the light of the discussion which we have had, and in the light of the rather mitigated assurance from the President of the Board of Trade that if the encircling gloom ever lifts—which I doubt so long as he and his hon. Friend are the incumbents of the benches opposite—they may be prepared to take another step, I beg to ask leave to withdraw the Clause.

Motion, and Clause, by leave, withdrawn.

10.55 p.m.

Mr. Jay: I beg to move, That further consideration of the Bill, as amended, be adjourned.
We have made, perhaps not sweeping progress, but some material progress with the Bill today. We have had useful, helpful and, if I may say so, rational discussion. I gather that there is no great enthusiasm in the House for proceeding for a great number of further hours tonight. For those reasons, and in the hope

that we may have equally useful, cooperative and expeditious consideration of the Bill next week, or whenever is the time agreed. I commend the Motion to the House.

Mr. Corfield: Naturally, I do not wish to oppose the right hon. Gentleman's admirable suggestion. I wish merely to make clear that I am not to be regarded as in any way a party to the manoeuvres of the Leader of the House in regard to what is to happen tomorrow. I think that round about 11 or 12 o'clock is quite late enough to discuss serious matters, and I favour the right hon. Gentleman's proposal.

Question put and agreed to.

Bill, as amended (in the Standing Committee), to be further considered Tomorrow.

EMPLOYMENT AGENCIES

Deferred proceeding resumed:—

Mr. DEPUTY SPEAKER, pursuant to Order (Sittings of the House (Morning Sittings)), put forthwith the Question,
That leave be given to bring in a Bill to regulate all employment exchanges, both public and private; to ensure competition between them; and for connected purposes.

Question negatived.

EMPLOYMENT (SUNDERLAND)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Walter Harrison.]

10.57 p.m.

Mr. Gordon A. T. Bagier: I welcome the opportunity to address the House on what seems to have become a very serious state of affairs in Sunderland. I refer to the level of unemployment, particularly unemployment among men. The deep concern of my constituents on this matter etas been represented to me by bodies such as the trades council, the Confederation of Shipbuilding and Engineering Employers, and by groups of trade unionists as well as by individuals.
It could well be argued, with justice, that the North-East, along with the rest of the country, is undergoing the pangs of recovery from the catastrophic economic mess which we inherited in 1964. It could be argued, also, that Sunderland and the North-East are suffering from a state of change in the pattern of industry rather than from a deep malaise, that many of the firms which are closing down would eventually have closed anyway, and that many plans for expansion or the introduction of new industry are being held in abeyance against the day when there is some relaxation in our economic situation.
Whatever the reasons, the unemployment figures for males in Sunderland are acceptable neither to me nor to those whom I represent. Two days ago, in reply to one of my hon. Friends, the Joint Parliamentary Secretary to the Ministry of Labour said that unemployment in the North-East generally totalled 48,689, or 3·6 per cent., in June, 1967, as compared with 3·2 per cent. in June, 1962. These are high and serious figures, nearly 50 per cent. higher than in the remainder of the country. But Sunderland itself is hit even harder.
The latest information available to me is that the overall figure of unemployment at the employment exchanges in Sunderland is 5·2 per cent., or 4,834. But the most important thing as I see it is that 7·2 per cent. is the figure for male unemployment, as compared with 1·8 per cent. for female unemployment. This compares with 3·3per cent. last

year. Worse still, we have more than doubled the male unemployment figures in Sunderland over a period of 12 months. Indeed, if one takes the figures going back as far as 1951, in only one year, 1963, were the male unemployment figures higher than they are today.
If I had to take some comfort from a trend which was showing some reduction, one would feel that one could explain this to one's constituents. But this is not so. These figures have shown an unfortunate trend. I hope that my hon. Friend the Joint Parliamentary Secretary will appreciate the seriousness of the trend as against the actual figures when they increased in May from 7·1 to 7·2 per cent. and from 6·9 per cent. in April to 7·1 per cent. in May, showing an unnatural trend for the time of year. In other words, there is no sign of a seasonal improvement which one would normally expect at this time of year. When these figures are examined in detail, they show that there is an absolute waste of skills in this part of the country.
I have taken the trouble to break down the figures in terms of skilled men. Quite often it is said that in the development districts, in spite of an overall figure of unemployment, there is a shortage of skilled trades. For some very highly sophisticated skills this may well be true. But in the catchment area of the Sunderland district, we have now 141 fitters unemployed, 79 painters, 74 joiners, 61 machinists, 56 welders, 47 platers and even 19 electricians—who have not appeared on the labour exchange register for some years—11 plumbers, sheet metal workers, bricklayers, and so on.
These are skilled men. I hope that my hon. Friend the Joint Parliamentary Secretary will take due consideration of the fact that in these figures of unemployed there is a potential which should not be ignored by himself or the Government. That is not the end of the story. Only announced in our local newspaper on 12th July was a further lay-off of 90 men by the firm British Crane and Excavator Corporation, a further rundown. In its statement—the company says that probably the reason is the lack of orders because of economic and other considerations.
What has Sunderland to offer? We have in the North-East, and Sunderland in particular, 170 acres of industrial sites


ready for use. We have this skilled, hardworking labour available. It is amongst the best in the country and will stand comparison with the best in the rest of the country. I think I can speak for the trade union leaders in the area in saying that they are willing to co-operate with any new industry which is prepared to settle in the area. There is a first-class environment for top management. I mention top management particularly because too often we have been used as a sort of outside factory space. It is unfortunate that sometimes our advance factories are used by London and Birmingham based firms to deal with their overspill. Whenever there is a slight recession or a squeeze, they are the first to empty and disappear.
The requirement in the North-East and Sunderland is for complete firms, complete with managements, who want to go there. I mention environment particularly because the image which is sometimes created in the South by what we have to offer in the North is particularly unfair.
We have beautiful countryside and fine stretches of beach. We have good living accommodation. Anyone who has a motor car is able to move in it. The area presents a first-class opportunity. Indeed, it offers a favour to industry and top management to come. We have good communications, and dual carriageways practically all the way to London. Liner train terminals are shortly to open up. The area opens up opportunity to industry which is prepared to come and help itself.
I would defend the Government in their attempts to help. They have applied far stricter restriction on industrial development certificates than did their predecessors. They have attempted to insist on industry moving out of some places. The redeployment of Government offices is an example which the Government have set. They have banned the building of offices in the areas of London and Birmingham. All this has helped to make industry move out and redeploy itself in the regions.
Investment grants of up to 45 per cent. on capital are offered in the development districts. The development districts have been greatly enlarged since the Labour Government took office. There is assist-

ance in industrial training grants for firms in development areas. If a firm is prepared to train its own personnel for additional jobs, it can receive cash grants from the Government. I understand that a 60 per cent. grant is allowed for machine tools installed for training purposes.
I am sorry that I have not given prior notice of this question to my hon. Friend the Joint Parliamentary Secretary, but I would be interested to know exactly how many firms in the private sector have taken advantage of that. My information is that in the North-East very few—indeed, possibly none—have done so. If it is possible to give the answer at such short notice, I would be interested to know whether my information is correct.
The Government have bent over backwards to try to encourage the private sector to come to the North-East. Indeed, when the Government took the necessary economic measures which they had to take at the time of the squeeze, they tried to protect the development districts, and the North-East in particular, from the full effects of those measures. That is in great contrast to what happened under previous Administrations.
What, therefore, can I suggest that the Government can do, or what can I suggest to try to help in the short term—because I believe that the short term is our biggest problem in the North-East and in Sunderland? With the long-term measures which the Government have taken, including the regional employment premium which comes into operation in September, we may see some fairly quick results.
The private sector has been offered all this—capital grants, industrial training and now the regional employment premium. I have got sick to death of the present and other Governments going down on their knees to private enterprise and expecting it to respond. We are handing it tremendous amounts in cash. What has happened to the "enterprise" in the title "private enterprise"? Why is it not taking advantage of all this? Not only would it help my area if it did, but it is essential for the country.
The types of skills which I have listed, including machinists, fitters, platers, sheet metal workers and electricians—people who should be occupied


in helping towards enlarging the national cake instead of drawing off it in the form of unemployment benefit—should be taken up. Instead, the cash assistance which is provided for private enterprise to do this is falling on stony ground.
There is no room for old and decaying industries—the North-East has suffered particularly badly from that type of industry— badly managed, grossly inefficient and bolstered up by Government handouts. There is a great future for young elterprising growth industries which are willing to take advantage of what we can offer. The production rate can go up if thee great skills are not wasted a id are not merely redeployed. The challenge, is clear. If private enterprise will not take up this challenge, public enterprise must do so. The country's wealth depends on improving its national cake: it depends on what it produces, and the workers in Sunderland, with the other workers throughout the country, want to play their part. They do not want to spend their time at labour exchanges. They want to use their excellent sikills in enlarging this cake.
I ask my hon. Friend the Parliamentary Secretary to make my views known to his right hon. Friend the President of the Board of Trade, who I hoped was to have replied to this debate. I want the President of the Board of Trade to know that if private enterprise will not do this, he ought to encourage public enterprise to do so. This is in accordance with our manifestos of 1964 and 1966. I ask the Parliamentary Secretary to use whatever influence he has in this direction to alleviate and bring about a reduction in the very serious unemployment situation which has arisen in Sunderland in the last couple of years.

11.11 p.m.

The Joint Parliamentary Secretary to the Ministry of Labour (Mr. Roy Hattersley): We have had a very fine example of an hon. Member using an Adjournment debate not only to remind the House of the problems of his constituency but also to remind the country of the advantages and the virtues of the help that his constituency can give to the nation as a whole. It was a rewarding experience even for me, the last survivor in the House from the two all-night sittings which have preceded today's events.
Clearly, the situation that the hon. Gentleman outlined is serious. The Government would not pretend for a moment that the situation that he has described is not one to which we should look with a good deal of concern and apprehension.
Let me remind my hon. Friend of the exact nature of the situation and the fact that on 12th June this year there were 5,025 people wholly unemployed within the county borough of Sunderland and within the related employment exchange area of Washington. The fact that the number of people registered as temporarily stopped is very small in no way mitigates the very serious situation which my hon. Friend has outlined. It is a situation which I confirm is regarded as serious by the Government. The Government regard it as a situation which needs urgent and immediate action. Although we understand the need for urgent and immediate action, it should also be explained that, as my hon. Friend knows, the problem which has to be tackled is longstanding and deep-seated. That is a problem which has existed in areas like his constituency for most of this century.
I do not pretend that the fact that it is deep-seated and longstanding makes it any better. It may well be that the fact that my hon. Friend's constituency has a long history of unemployment and uncertainty means that the problems are all the greater for those people who, between the wars and since, have never had the sort of stability, certainty and security that would prepare them for a short period of unemployment. But if we are to understand the nature of the problem facing Sunderland and if we are to make cogent attempts to solve the problem, it is important to understand how the problem arises and how long it has been going on.
It arises basically from the area's dependence on too few industries—basically heavy industries which are particularly vulnerable to periods of economic uncertainty and are particularly vulnerable at times of disinflation. I refer to three basic industries—shipbuilding, coal mining and marine engineering. They are three industries which since their development on a large scale, and since the operation of the modern economy, have always been hit first, hardest and longest during periods of disinflation. It is Sunderland's misfortune, as it has been for many years, to be particularly dependent


on them. The Government would say that it is over-dependent on them. In times of disinflation they are particularly susceptible to difficulties and troubles, and even in times of maximum demand prove incapable of meeting all the needs of the potential employed population in the area.
In this period of technological change and advance these industries are making fewer and fewer demands on the working population of the area. Over the five years between 1960 and 1965 employment within them has fallen by rather more than 2,000 adults. In terms of demand for labour at least, they are declining. I must tell my hon. Friend in all honesty that their future prospects are mixed. As he knows, there are in the area about which he is particularly concerned two coal mines the future of which is at least partly in doubt, although there are three which seem likely to continue. I am sure that he knows that there are shipbuilding orders in the yards stretching into 1968–69, but they are not substantial and are not as great as the shipbuilders would wish. I am sure that he also knows that redundancies were recently declared in the principal maritime engineering companies in the area.
Therefore, if we are to solve the problem which my hon. Friend has set out so clearly and cogently we must look at it in terms of finding new industries, rather than relying on these industries which have shown themselves, through no fault of their own but through the fault of the economic system as we know it, to be incapable of providing continuous total employment for the area. The answer is clearly new industries in several senses—new factories, new developments, new projects, and producing new capacity, new capital resources. They must be new industries concentrating on new techniques and products, industries which are less susceptible to economic fluctuations than the old and provide a degree of diversification for the area, and which offer the sort of stability which could not come from over-dependence on the three basic trades which have characterised the working life of Sunderland for the past 100 years.
Perhaps principally among the industries on which the constituency, the County Borough and the surrounding area

must rely are the engineering and electrical goods industries. The record shows that already that sector is expanding fast within the Sunderland and Washington areas. The fact that there has been an expansion of 44·4 per cent. in jobs between 1960 and 1965 is eloquent testimony to the case which my hon Friend made that industries which are prepared to go to Sunderland and areas like it find fruitful opportunities, manpower available, and possibilities of developing in a way which is perhaps not open to them if they choose to remain in the overcrowded areas of the South and Midlands.
I hope that many more new firms will look at the successful example of these factories within the engineering and electrical goods sector and will feel that they, too, can make some contribution of benefit to the area and to themselves by moving there. Certainly it would be the Government's intention to help them all that they can.
As my hon. Friend knows, two Board of Trade industrial estates already exist; one advance factory is already in occupation; two more advance factories should be completed by August, and the Development Corporation has projects approved for nine more—all these things despite a shortage of good industrial land which my right hon. Friend the President of the Board of Trade tries to overcome by making sure that the officers of his Department do all that they can to find and utilise every potential site in the area. It is because of these positive policies that the Government is able to point to a very substantial record in the field of its industrial development certificates. Last year, there were 14 certificates, producing 670 new jobs, and 14 also in 1965, producing 1,020 jobs. In the first quarter of this year, six have been issued, providing 520 jobs. Clearly this sort of record must give my hon. Friend every encouragement. If this continues for the final three-quarters of this year, then the prospects for the area's improvement are good.

Mr. Bagier: Mr. Bagier rose—

Mr. Hattersley: I cannot give way. I have only three minutes left and, in fairness to him as well as to this area, I must deal with his substantial points before the rules of order facing me make that impossible. The most important point concerns the new measures which the


Government has brought into being to see that the industrial expansion necessary for the area is made possible.
My hon. Friend spoke of capital grants and the special assistance which is available for training semi-skilled men within the area. There is a 70 per cent. grant for financing semi-skilled training in development areas, but I must confirm my hon. Friend's suspicion that at this moment there are no firms in his area using equipment which has been financed in that way. They have had only since last March to (ID this, and it takes some time for the scheme to get off the ground and for assistance with semi-skilled training to get into operation. But the scheme is being carried forward.
At the same time, the most progress, we believe, must come from the regional employment premium. My hon. Friend has reminded the House that every manufacturing organisation which works in Sunderland, or which develops a new factory there, or expands an existing factory, will receive from next autumn a substantial extra sum of money for every man and woman which it employs. We have never before in our history decided to give continuing encouragement—a running incentive to our industrialists in the form of constant revenue for industrial expansion—and I believe that those firms

which are faced with making the marginal decision of staying in Sunderland, of expanding there, or of building outside the development area, will find that the prospect of an extra thirty shillings a week for every man they choose to employ in that area is a potent inducement to stay or to go there.
This is a most powerful factor in the manufacturing areas such as Sunderland in attracting, and then retaining, the sort of manufacturing capacity which is so necessary for the reduction of unemployment. I assure my hon. Friend that the Government says that to have 5·2 per cent. of the population unemployed is a waste industrially, a social waste which is inexcusable and unforgivable, and it is because of that that this premium has been introduced. It will, we think, do much to solve the problem to which my hon. Friend has referred tonight. It will also, in future years, enable those areas like Sunderland, traditionally faced with unemployment compared with the more prosperous parts of the country, to operate at full steam and to use all their talents. This, we say, is locally desirable and nationally essential.

Question put and agreed to.

Adjourned accordingly at twenty-five minutes past Eleven o'clock.